PALT Paltalk Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 30, 2024

 

INTELLIGENT PROTECTION MANAGEMENT CORP.

(Exact name of registrant as specified in its charter)

 

Delaware		001-38717		20-3191847
(State or other jurisdiction		(Commission File Number)		(IRS Employer
of incorporation)				Identification No.)

 

30 Jericho Executive Plaza, Suite 400E Jericho, NY		11753
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (212) 967-5120

 

Paltalk, Inc.

(Former name or former address, if changed since last report)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		PALT		The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

INTRODUCTORY NOTE

 

On January 2, 2025 (the “Closing Date”), Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.) (the “Company”) completed its previously announced acquisition of Newtek Technology Solutions, Inc., a New York corporation (“NTS”), pursuant to that certain Agreement and Plan of Merger (the “Acquisition Agreement”), by and among the Company, PALT Merger Sub 1, Inc., a New York corporation and a direct and wholly owned subsidiary of the Company (“First Merger Sub”), PALT Merger Sub 2, LLC, a Delaware limited liability company and a direct and wholly owned subsidiary of the Company (“Second Merger Sub”), NTS and NewtekOne, Inc., a Maryland corporation and the sole stockholder of NTS (“Newtek”). Pursuant to the terms of the Acquisition Agreement, on the Closing Date: (i) NTS merged with and into First Merger Sub, with NTS continuing as the surviving entity (the “Interim Surviving Entity” and such merger, the “First Step Merger”), and (ii) immediately following the consummation of the First Step Merger, the Interim Surviving Entity merged with and into Second Merger Sub (the “Second Step Merger” and, together with the First Step Merger, the “Acquisition”), with the Second Merger Sub surviving as a wholly owned subsidiary of the Company (in such capacity, the “Surviving Entity”). Following the closing of the Acquisition (the “Acquisition Closing”), the Company changed its name from “Paltalk, Inc.” to “Intelligent Protection Management Corp.”

 

On the Closing Date and prior to the Acquisition Closing, the Company completed its previously announced sale to Meteor Mobile Holdings, Inc., a Delaware corporation (“Meteor Mobile”), of its telecommunications services provider, “Vumber”, as well as its “Paltalk” and “Camfrog” applications and certain assets and liabilities related to such services provider and applications (the “Transferred Assets” and such sale, the “Divestiture”) pursuant to that certain Asset Purchase Agreement (the “Divestiture Agreement”), by and among the Company, its wholly owned subsidiaries Paltalk Holdings, Inc. (“Paltalk Holdings”), Paltalk Software, Inc., Camshare, Inc., A.V.M. Software, Inc., and Vumber, LLC (collectively, the “Sellers”), and Meteor Mobile. As a result of the Divestiture, the Company is no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications software to consumers, as and to the extent such businesses were previously conducted by the Company pursuant to the “Vumber,” “Paltalk” and “Camfrog” applications (the “Business”). In addition, prior to the Acquisition Closing, the Company ceased all operations of the “Tinychat” service and application.

 

Section 1 — Registrant’s Business and Operations

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Registration Rights Agreement

 

Pursuant to the Acquisition Agreement, on the Closing Date, the Company entered into a Registration Rights Agreement with Newtek (the “Registration Rights Agreement”), pursuant to which, among other things, and subject to certain limitations set forth therein, the Company agreed to use its reasonable best efforts to prepare and file a registration statement registering the resale of the Conversion Shares (as defined herein) as soon as practicable following the Acquisition Closing.

 

In addition, pursuant to the Registration Rights Agreement, Newtek has the right to require the Company, subject to certain limitations set forth therein, to effect the registration of up to five underwritten offerings of Conversion Shares. The Registration Rights Agreement also provides Newtek with certain customary piggyback registration rights. These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration or offering and the Company’s right to delay or withdraw a registration statement under certain circumstances.

 

The foregoing description of the Registration Rights Agreement is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Registration Rights Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.

 

 

Section 2 — Financial Information

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The Acquisition

 

As discussed in the Introductory Note, which is incorporated by reference into this Item 2.01, on the Closing Date, the Company completed its previously announced Acquisition of NTS pursuant to the Acquisition Agreement.

 

The aggregate consideration delivered by the Company to Newtek at the Acquisition Closing consisted of (i) $4,000,000 in cash (as adjusted pursuant to the Acquisition Agreement, the “Acquisition Closing Cash Consideration”) and (ii) 4,000,000 shares of the Company’s Series A Non-Voting Common Equivalent Stock (the “Preferred Stock” and such shares issued at the Acquisition Closing, the “Acquisition Closing Stock Consideration” and together with the Acquisition Closing Cash Consideration, the “Acquisition Closing Consideration”). The Preferred Stock will automatically convert into one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (subject to certain customary anti-dilution adjustments), upon the occurrence of certain qualifying transfers by Newtek to third parties (the shares of Common Stock issuable upon such conversion, “Conversion Shares”).

 

In addition to the Acquisition Closing Consideration, the Acquisition Agreement provides that Newtek is entitled to receive an amount up to $5,000,000 (the “Acquisition Earn-Out Amount”) based on the Company’s achievement of certain cumulative average adjusted EBITDA thresholds for the 2025 and 2026 fiscal years. The Acquisition Earn-Out Amount may be paid, at the Company’s sole discretion, in cash (the “Acquisition Earn-Out Cash Consideration”), in shares of Preferred Stock (the “Acquisition Earn-Out Stock Consideration”) or in a combination thereof. Pursuant to the Acquisition Agreement, to the extent that all or a portion of the Acquisition Earn-Out Amount is paid in shares of Preferred Stock, the number of shares of Preferred Stock to be issued to Newtek will be calculated based on the average of the daily volume weighted average prices during each trading day during a 60 calendar-day period ending on December 31, 2026; provided, that in no event shall such price be less than $1.00.

 

Pursuant to the Acquisition Agreement, if the issuance of the Acquisition Earn-Out Stock Consideration would cause Newtek’s “total equity” (as calculated under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and as implemented and interpreted by the Board of Governors of the Federal Reserve System) in the Company to exceed one-third of the Company’s total equity (the “Total Equity Cap”), then the number of shares of Preferred Stock issuable as Acquisition Earn-Out Stock Consideration will be adjusted so that the Company will issue to Newtek the maximum number of shares of Preferred Stock that would not cause Newtek’s total equity to exceed the Total Equity Cap, with a corresponding increase to the Acquisition Earn-Out Cash Consideration.

 

The foregoing description of the Acquisition Agreement is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Acquisition Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report and is incorporated by reference herein.

 

The Divestiture

 

As discussed in the Introductory Note, on the Closing Date and prior to the Acquisition Closing, the Company completed its previously announced sale of the Transferred Assets to Meteor Mobile. The consideration delivered by Meteor Mobile to the Company at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities (the “Divestiture Closing Consideration”).

 

In addition to the Divestiture Closing Consideration, the Sellers are entitled to receive, with respect to each Earn-Out Period, as defined and described below, certain payments in cash based on the cash revenue, net of any refunds, received by Meteor Mobile that is attributable to the Business (such cash revenue, the “Revenue”), as follows:

 

●

from the six-month period beginning on July 1, 2025 and ending on December 31, 2025 (“Earn-Out Period 1”), an amount equal to (i) for any Revenue greater than or equal to $3,500,000 and less than $4,250,000, the amount of such Revenue multiplied by 0.30 plus (ii) for any Revenue greater than or equal to $4,250,000, the amount of such Revenue in excess of $4,250,000 multiplied by 0.40; and

 

  

●

from each of the twelve-month period beginning on January 1, 2026 and ending on December 31, 2026 (“Earn-Out Period 2”), the twelve-month period beginning on January 1, 2027 and ending on December 31, 2027 (“Earn-Out Period 3”), and the twelve-month period beginning on January 1, 2028 and ending on December 31, 2028 (“Earn-Out Period 4” and collectively with Earn-Out Period 1, Earn-Out Period 2 and Earn-Out Period 3, the “Earn-Out Periods”), an amount equal to (i) for any Revenue greater than or equal to $7,000,000 and less than $8,500,000, the amount of such Revenue multiplied by 0.30 plus (ii) for any Revenue greater than or equal to $8,500,000, the amount of such Revenue in excess of $8,500,000 multiplied by 0.40 (the aggregate amount, if any, earned during the Earn-Out Periods, the “Divestiture Earn-Out Amount”).

  

In the event of a change of control (as defined in the Divestiture Agreement) of Meteor Mobile during any of the Earn-Out Periods, the Company is entitled to receive an acceleration payment in cash, net of any Divestiture Earn-Out Amounts previously paid to the Company (the “Acceleration Payment”). If any of the Transferred Assets are sold independently from the other assets of Meteor Mobile, the Company will be entitled to (i) 50% of the aggregate consideration paid to Meteor Mobile for the Transferred Assets minus (ii) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (iii) the aggregate amount of any Acceleration Payments previously paid through such date. If any of the Transferred Assets are sold contemporaneously with other assets of Meteor Mobile, the Company is entitled to (x) the aggregate consideration paid to Meteor Mobile for the Transferred Assets multiplied by the ratio of the trailing 12-month EBITDA of the Transferred Assets sold and the EBITDA of all assets sold minus (y) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date of the change of control, minus (z) the aggregate amount of any Acceleration Payments previously paid through such date. The minimum Acceleration Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000, $450,000 and $300,000, respectively, and the Acceleration Payments payable to the Company are capped at $5,000,000 in the aggregate.

 

In connection with the closing of the Divestiture, on the Closing Date, Paltalk Holdings and Meteor Mobile entered into a perpetual, irrevocable, royalty-free, fully paid-up, worldwide, non-exclusive license to use, reproduce, modify, display, distribute, and otherwise exploit the Vumber patent (the “Patent License Agreement”), subject to certain rights and restrictions. The Patent License Agreement will terminate upon the expiration of the Vumber patent unless earlier terminated pursuant to its terms.

 

The foregoing description of the Divestiture Agreement is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Divestiture Agreement, a copy of which is filed as Exhibit 2.2 to this Current Report and is incorporated by reference herein.

 

Section 3 — Securities and Trading Markets

 

Item 3.02. Unregistered Sales of Equity Securities.

 

The information set forth in Item 2.01 of this Current Report regarding the Acquisition Closing Stock Consideration and the Acquisition Earn-Out Stock Consideration is incorporated by reference into this Item 3.02. The issuance of the Acquisition Closing Stock Consideration was, and issuance of the Acquisition Earn-Out Stock Consideration, if any, will be, undertaken in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.

 

Item 3.03. Material Modification to Rights of Security Holders.

 

The disclosure required by this Item 3.03 is included in Item 5.03 of this Current Report and is incorporated herein by reference.

 

 

Section 5 — Corporate Governance and Management

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of Executive Officers

 

Effective as of the Closing Date, the Company’s Board of Directors (the “Board”) (i) reaffirmed the appointment of certain executive officers to their existing roles, (ii) approved certain executive officer title changes and the modification of the duties of certain executive officers, and (iii) appointed Jared Mills, who previously served as the President of NTS, as the Company’s President such that, following the Acquisition Closing, the executive officers of the Company (the “Executive Officers”) have the respective titles and roles as set forth below (such changes as reflected below, the “Officer Appointments”):

 

Name		Former Title and Roles		New Title and Roles
Jason Katz		Chief Executive Officer, President and Chief Operating Officer		Chief Executive Officer
Kara Jenny		Chief Financial Officer		No change in title or role
Jared Mills		-		President
Adam Zalko		Senior Vice President		Chief Operating Officer

 

Mr. Mills, 51, is a seasoned technology and business leader with over 20 years of experience in Managed IT Services and Global Scale Multi-Site Private Cloud Datacenter Operations. Mr. Mills previously served as President, Chief Operating Officer and as a director of NTS from March 2019 to January 2025, where he was responsible for overseeing day-to-day operations in sectors such as technology, sales, marketing and service delivery, with a focus on driving profitability and revenue growth. Mr. Mills also served as Chief Technology Officer of Newtek and Newtek Bank from December 2022 to January 2025, where he led the development and execution of technology strategy and oversaw software development, data management, cybersecurity and infrastructure. From December 2021 to December 2023, Mr. Mills served as President, Chief Operating Officer and as a director of Cloud Nine Solutions, Inc., a subsidiary of Newtek and Certified MBE consulting company. From April 2016 to March 2019, Mr. Mills served as Director of Sales and Business Development at Enterprise Technology Services, an IT infrastructure management company. Mr. Mills’s background and experience as a lead executive officer and board member of technology driven companies provides him with extensive and valuable knowledge of managing diverse teams, transforming operations, and creating resilient, high-performance infrastructure.

 

Except as pursuant to the Acquisition Agreement and the Mills Employment Agreement (as defined and described below), there are no arrangements or understandings between Mr. Mills and any other persons pursuant to which Mr. Mills was named President of the Company. In addition, there are no transactions between the Company and Mr. Mills or his immediate family members requiring disclosure under Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

Executive Officer Employment Agreements

 

Effective as of the Acquisition Closing and in connection with the Officer Appointments, the Company entered into executive employment agreements with each of the Executive Officers as described below.

 

Katz Employment Agreement

 

On the Closing Date, the Company entered into a Second Amended and Restated Executive Employment Agreement with Jason Katz, the Company’s Chief Executive Officer (the “Katz Employment Agreement”), which amends and restates Mr. Katz’s existing employment agreement with the Company, dated as of March 23, 2022. Except as provided herein, all other terms and conditions of the Katz Employment Agreement are substantially the same as such terms and conditions under the prior employment agreement between the Company and Mr. Katz.

 

 

The Katz Employment Agreement, among other things, (i) modifies Mr. Katz’s title and duties to reflect his role of Chief Executive Officer and (ii) provides that if Mr. Katz’s employment is terminated by the failure of the Company to renew the Katz Employment Agreement for a renewal term or is terminated by the Company without “cause” (as defined in the Katz Employment Agreement) or if Mr. Katz resigns for “good reason” (as defined in the Katz Employment Agreement), then, subject to Mr. Katz’s execution of a general release of claims in favor of the Company and compliance with certain other restrictive covenants in the Katz Employment Agreement, the Company will (A) pay Mr. Katz severance equal to one times Mr. Katz’s then-current annualized base salary, less the amount of all compensation paid to Mr. Katz during the then-current term of the Katz Employment Agreement; provided, that in no event will such payment equal less than four months of Mr. Katz’s then-current annualized base salary, and (B) continue to pay Mr. Katz’s health insurance premiums for the earlier of the remainder of the then-current term of the Katz Employment Agreement or the date Mr. Katz’s coverage terminates for any reason.

 

The foregoing description of the Katz Employment Agreement is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Katz Employment Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report and is incorporated by reference herein.

 

Jenny Employment Agreement

 

On the Closing Date, the Company entered into a Second Amended and Restated Executive Employment Agreement with Kara Jenny, the Company’s Chief Financial Officer (the “Jenny Employment Agreement”), which amends and restates Ms. Jenny’s existing employment with the Company, dated as of March 23, 2022. Except as provided herein, all other terms and conditions of the Jenny Employment Agreement are substantially the same as such terms and conditions under the prior employment agreement between the Company and Ms. Jenny.

 

The Jenny Employment Agreement, among other things, (i) increases Ms. Jenny’s annualized base salary from $285,000 to $310,000, effective retroactively as of January 1, 2025, and (ii) provides that if Ms. Jenny’s employment is terminated by the failure of the Company to renew the Jenny Employment Agreement for a renewal term or is terminated by the Company without “cause” (as defined in the Jenny Employment Agreement) or if Ms. Jenny resigns for “good reason” (as defined in the Jenny Employment Agreement), then, subject to Ms. Jenny’s execution of a general release of claims in favor of the Company and compliance with certain other restrictive covenants in the Jenny Employment Agreement, the Company will pay (A) Ms. Jenny severance equal to one times Ms. Jenny’s then-current annualized base salary, less the amount of all compensation paid to Ms. Jenny during the then-current term of the Jenny Employment Agreement; provided, that in no event will such payment equal less than four months of Ms. Jenny’s then-current annualized base salary, and (B) continue to pay Ms. Jenny’s health insurance premiums for the earlier of the remainder of the then-current term of the Jenny Employment Agreement or the date Ms. Jenny’s coverage terminates for any reason.

 

The foregoing description of the Jenny Employment Agreement is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Jenny Employment Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report and is incorporated by reference herein.

 

New Executive Officer Employment Agreements

 

On the Closing Date, the Company entered into an Executive Employment Agreement with Adam Zalko, the Company’s Chief Operating Officer (the “Zalko Employment Agreement”). The Zalko Employment Agreement provides that Mr. Zalko’s annualized base salary will be $265,000 (an increase of $40,000 from his current salary), effective retroactively as of January 1, 2025. Commencing on January 1, 2026, if Mr. Zalko is still employed in good standing with the Company, Mr. Zalko will be entitled to receive an annualized base salary of $280,000, prorated for any partial years of employment with the Company. Mr. Zalko’s base salary will be reviewed by the Board annually and may be increased, but not decreased, at the discretion of Board.

 

Also on the Closing Date, the Company entered into an Executive Employee Agreement with Jared Mills, the Company’s President (the “Mills Employment Agreement” and together with the Zalko Employment Agreement, the “New Executive Officer Employment Agreements”). The Mills Employment Agreement provides that Mr. Mills will be entitled to receive an annualized base salary of $325,000, which will be reviewed annually and may be increased, but not decreased, at the discretion of Board.

 

  

The New Executive Officer Employment Agreements have a one-year term with automatic successive one-year renewals, unless earlier terminated in accordance with the terms of the New Executive Officer Employment Agreements. Any annual incentive bonuses awarded pursuant to the New Executive Officer Employment Agreements will be determined by the Board, based on criteria to be established jointly by the Board and Messrs. Zalko and Mills, as applicable.

 

In addition, the New Executive Officer Employment Agreements provide that if either of Messrs. Zalko or Mills is terminated by the failure of the Company to renew the applicable New Executive Officer Employment Agreement for a renewal term, is terminated by the Company without “cause” (as defined in the New Executive Officer Employment Agreements) or resigns for “good reason” (as defined in the New Executive Officer Employment Agreements), then, subject to the applicable executive officer’s execution of a general release of claims in favor of the Company and compliance with certain other restrictive covenants in the applicable New Executive Officer Employment Agreement, the Company will (A) pay the applicable executive officer severance equal to one times such executive officer’s then-current annualized base salary, less the amount of all compensation paid to such executive officer during the then-current term of the applicable New Executive Officer Employment Agreement; provided, that in no event will such payment equal less than four months of such executive officer’s then-current annualized base salary, and (B) continue to pay such executive officer’s health insurance premiums for the earlier of the remainder of the then-current term of the applicable New Executive Officer Employment Agreement or the date such executive officer’s coverage terminates for any reason.

 

The New Executive Officer Employment Agreements also contain customary provisions relating to, among other things, confidentiality, non-competition, non-solicitation and non-disparagement.

 

The foregoing descriptions of the Zalko Employment Agreement and the Mills Employment Agreement are summaries only, do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Zalko Employment Agreement and the Mills Employment Agreement, copies of which are filed as Exhibit 10.4 and Exhibit 10.5, respectively, to this Current Report and are incorporated by reference herein.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.

 

Name Change and Ticker Change

 

In connection with the Acquisition Closing, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation, as amended (the “Charter” and such amendment, the “Charter Amendment”), to change its corporate name from “Paltalk, Inc.” to “Intelligent Protection Management Corp.”, effective as of the Closing Date (the “Name Change”). In connection with the Charter Amendment, the Board authorized and approved an amendment to the Amended and Restated Bylaws of the Company (the “Bylaws”) to update the Bylaws to reflect the Company’s new name (the “Bylaws Amendment”). In connection with the Name Change, the ticker symbol for the Company’s Common Stock on The Nasdaq Capital Market will change from “PALT” to “IPM” (the “Ticker Change”). Trading under the new ticker symbol will be effective as of the opening of trading hours on January 6, 2025. The CUSIP number of the Company’s Common Stock will not change as a result of the Name Change or Ticker Change.

 

The Name Change and Ticker Change do not affect the rights of the Company’s security holders. The Company’s Common Stock will continue to be listed on The Nasdaq Capital Market. Following the Name Change, any stock certificates that reflect the former name of the Company will continue to be valid. Certificates or book-entry designations reflecting the Name Change will be issued in due course as old stock certificates are tendered for exchange or transfer to the Company’s transfer agent.

 

The foregoing descriptions of the Charter Amendment and the Bylaws Amendment are summaries only, do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Charter Amendment and Bylaws Amendment, copies of which are filed as Exhibit 3.1 and Exhibit 3.2, respectively, to this Current Report and are incorporated by reference herein.

 

  

Series A Non-Voting Common Equivalent Stock

 

On December 30, 2024, the Company filed with the Secretary of State of the State of Delaware the Certificate of Designations designating the Preferred Stock (the “Certificate of Designations”), and establishing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, or terms or conditions of redemption of the shares of Preferred Stock. The total number of authorized shares of Preferred Stock is 9,000,000 shares.

 

Maturity

 

The shares Preferred Stock are perpetual securities, unless converted in accordance with the Certificate of Designations.

 

Voting Rights

 

Holders of Preferred Stock generally do not have voting rights, except with respect to certain protective matters such as amendments to the Charter or the Certificate of Designations that significantly and adversely affect the preferences, rights, privileges or powers of the Preferred Stock.

 

Ranking

 

Except with respect to the liquidation preference described below, the Preferred Stock ranks equally with the Company’s Common Stock with respect to dividends or distributions declared by the Board, and rights upon any liquidation, dissolution, winding up or similar proceeding of the Company, as provided in the Charter.

 

Conversion and Transfer

 

Each share of Preferred Stock will automatically convert into one share of Common Stock upon the consummation of a transfer by a holder that is both (i) to a person who is not an affiliate of the holder for purposes of the BHCA and (ii) (A) to the Company; (B) in a widespread public distribution; (C) in which no transferee (or group of associated transferees) would receive 2% or more of the outstanding securities of any class of voting securities of the Company; or (D) to a purchaser that would control more than 50% of every class of voting securities of the Company without any transfer from the holder. The conversion rate applicable to the Preferred Stock is subject to certain customary anti-dilution adjustments.

 

Dividends

 

Holders of Preferred Stock are entitled to receive dividends at the same time and on the same terms as the holders of the Company’s Common Stock in an amount equal to the product of the conversion rate then in effect and the per share dividend amount being paid in respect of each share of the Company’s Common Stock. The Board cannot declare or pay any cash dividend or make cash distributions in respect of the Company’s Common Stock unless the Board declares and pays to the holders Preferred Stock at the same time and on the same terms as the holders of the Company’s Common Stock the dividend to which the shares of Preferred Stock are entitled.

 

Liquidation

 

In the event of any liquidation, dissolution or winding up of the affairs of the Company, holders of the Preferred Stock are entitled to receive, in preference to the holders of the Company’s Common Stock, an amount per share equal to $0.0001, and would then participate equally with the Company’s Common Stock in the remainder of the distributions.

 

Preemptive and Other Rights

 

The shares of Preferred Stock do not have any voting powers except as expressly described in the Certificate of Designations, and, except as may otherwise be required by law, do not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth in the Certificate of Designations and in the Charter. The shares of Preferred Stock do not have preemptive or subscription rights.

 

 

Repurchases

 

Subject to the limitations imposed in the Certificate of Designations, the Company may purchase and sell shares of the Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board or any duly authorized committee of the Board may determine.

 

Sinking Fund

 

The shares of Preferred Stock are not subject to the operation of a sinking fund.

 

The foregoing description of the Preferred Stock is a summary only, does not purport to be complete, and is subject to, and qualified in its entirety by reference to, the full text of the Certificate of Designations, a copy of which is attached as Exhibit 3.3 to this Current Report and is incorporated by reference herein.

 

Item 5.05. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

 

In order to align with the post-Acquisition business, effective on the Closing Date, the Board approved and adopted an amended Code of Conduct (the “Code of Conduct”) applicable to all employees, officers and directors of the Company, including its Chief Executive Officer, Chief Financial Officer and other executive officers. The changes to the Code of Conduct include, among other things: (i) clarifying the definition of perceived and actual conflicts of interest, (ii) providing additional detail regarding practices for handling proprietary information, (iii) clarifying that the Code of Conduct does not prohibit employees from reporting violations to law enforcement and other governmental agencies, and (iv) updating the process for reporting violations of the Code of Conduct and enforcement of any such violations. The adoption of the amended Code of Conduct did not relate to or result in any waiver, explicit or implicit, of any provision of the previous Code of Conduct.

 

A copy of the Code of Conduct will be available on the Company’s website at www.investors.ipm.com/corporate-governance. In the future, the Company intends to make any legally required disclosures regarding any amendments to the Code of Conduct or any waivers from a provision of the Code of Conduct on the website at the foregoing internet address.

 

Additionally, effective on the Closing Date, the Board approved and adopted an amended Whistleblower Policy (the “Whistleblower Policy”). The changes to the Whistleblower Policy include, among other things: (i) defining the individuals covered by the Whistleblower Policy, (ii) clarifying that the Whistleblower Policy does not prohibit employees from reporting violations to law enforcement and other governmental agencies, (iii) describing the role of the Audit Committee of the Board and Chief Financial Officer with respect to handling reports made under the Whistleblower Policy, and (iv) expanding provisions prohibiting retaliation for reports made under the Whistleblower Policy. Complaints under the Whistleblower Policy can be made through the Company’s Compliance/Whistleblower Hotline, which is administered through a third party on a confidential, anonymous basis, and is accessible at reports.syntrio.com/IPM.

 

The foregoing descriptions of the Code of Conduct and the Whistleblower Policy are summaries only, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the full text of the Code of Conduct and the Whistleblower Policy, copies of which are filed as Exhibits 14.1 and 14.2, respectively, to this Current Report and are incorporated by reference herein.

 

Section 7 — Regulation FD

 

Item 7.01. Regulation FD Disclosure.

 

On the Closing Date, the Company issued a press release announcing the completion of the Acquisition, the Divestiture and the related transactions. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated into this Item 7.01 by reference herein.

 

 

The information included under Item 7.01 of this Current Report (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filing.

 

Section 9 — Financial Statements and Exhibits

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Businesses Acquired.

 

The audited and unaudited historical financial statements and related notes thereto set forth under the caption “Index to NTS Financial Information” on pages F-2 through F-42 of the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on November 26, 2024 (the “Proxy Statement”) are hereby incorporated by reference herein.

 

(b) Pro Forma Financial Information.

 

The unaudited pro forma condensed combined financial information and related notes thereto set forth under the caption “Unaudited Pro Forma Condensed Combined Financial Information” on pages 83 through 94 of the Proxy Statement are hereby incorporated by reference herein.

 

(d) Exhibits

 

Exhibit No.		Description
2.1#		Agreement and Plan of Merger, dated August 11, 2024, by and among Paltalk, Inc., PALT Merger Sub 1, Inc., PALT Merger Sub 2, LLC, Newtek Technology Solutions, Inc. and NewtekOne, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed on August 12, 2024 by the Company with the SEC).
2.2#*		Asset Purchase Agreement, dated November 7, 2024, by and among Paltalk, Inc., Paltalk Holdings, Inc., Paltalk Software, Inc., Camshare, Inc., A.V.M. Software, Inc., Vumber, LLC, and Meteor Mobile Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed on November 8, 2024 by the Company with the SEC).
3.1		Certificate of Amendment to the Certificate of Incorporation of Intelligent Protection Management Corp.
3.2		Amendment to the Amended and Restated Bylaws of Intelligent Protection Management Corp.
3.3		Certificate of Designations of Series A Non-Voting Common Equivalent Stock of Intelligent Protection Management Corp.
10.1		Registration Rights Agreement, dated January 2, 2025, by and between Intelligent Protection Management Corp. and NewtekOne, Inc.
10.2		Second Amended and Restated Executive Employment Agreement, dated January 2, 2025, by and between Intelligent Protection Management Corp. and Jason Katz.
10.3		Second Amended and Restated Executive Employment Agreement, dated January 2, 2025, by and between Intelligent Protection Management Corp. and Kara Jenny.
10.4		Executive Employment Agreement, dated January 2, 2025, by and between Intelligent Protection Management Corp. and Adam Zalko.
10.5		Executive Employment Agreement, dated January 2, 2025, by and between Intelligent Protection Management Corp. and Jared Mills.
14.1		Code of Conduct of Intelligent Protection Management Corp.
14.2		Whistleblower Policy of Intelligent Protection Management Corp.
23.1		Consent of Grassi & Co., CPAs, P.C., independent certified public accountants of Newtek Technology Solutions, Inc.
99.1		Press Release of Intelligent Protection Management Corp., dated January 2, 2025 (furnished pursuant to Item 7.01).
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

#

Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC or its staff upon request.

*

Certain confidential information has been excluded pursuant to Item 601(b)(2)(ii) of Regulation S-K. Such excluded information is not material and is the type that the Company treats as private or confidential.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: January 2, 2025
	INTELLIGENT PROTECTION MANAGEMENT CORP.
	By:	/s/ Jason Katz
		Jason Katz
		Chief Executive Officer

 

 

 10

 

 

 

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT

TO

CERTIFICATE OF INCORPORATION

OF

PALTALK, INC.

 

Paltalk, Inc. (the “Corporation”), a corporation duly organized and existing under the laws of the State of Delaware, by its duly authorized officer, does hereby certify that:

 

1. This Certificate of Amendment amends the provisions of the Corporation’s Certificate of Incorporation, as amended, originally filed with the Delaware Secretary of State on July 19, 2005 (the “Certificate of Incorporation”).

 

2. The Board of Directors of the Corporation has duly adopted resolutions (i) authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware an amendment of the Certificate of Incorporation to change the name of the Corporation to “Intelligent Protection Management Corp.” and (ii) declaring such amendment to be advisable and in the best interest of the Corporation.

 

3. Upon this Certificate of Amendment becoming effective, Article First of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:

 

“FIRST: The name of the corporation shall be: Intelligent Protection Management Corp.”

 

4. Upon this Certificate of Amendment becoming effective, the Certificate of Incorporation is hereby amended by replacing all headings containing the words “PALTALK, INC.” with “INTELLIGENT PROTECTION MANAGEMENT CORP.”

 

5. This Certificate of Amendment has been duly approved by the Board of Directors of the Corporation in accordance with Sections 141(f) and 242 of the General Corporation Law of the State of Delaware.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this 2nd day of January, 2025.

 

	PALTALK, INC.,
	a Delaware corporation
	/s/ Jason Katz
	Jason Katz
	Chief Executive Officer

 

 

Exhibit 3.2

 

AMENDMENT TO

AMENDED AND RESTATED

BYLAWS

OF paltalk, INC.

 

Pursuant to Article NINTH of the Certificate of Incorporation, as amended, of Paltalk, Inc., a Delaware corporation (the “Corporation”), Article X, Section 10.4 of the Amended and Restated Bylaws of the Corporation (the “Bylaws”), and Section 109 of the General Corporation Law of the State of Delaware, on the date hereof, the Bylaws of the Corporation are hereby amended as follows:

 

Article I, Section 1.1 of the Bylaws is hereby deleted in its entirety and replaced with the following:

 

“Section 1.1 Name. The legal name of this corporation (hereinafter called the “Corporation”) is Intelligent Protection Management Corp.”

 

Additionally, all headings contained in the Bylaws are hereby amended to replace the words “PALTALK, INC.” with “INTELLIGENT PROTECTION MANAGEMENT CORP.” Except as modified and amended hereby, the Bylaws remain in full force and effect with no further amendment or modification.

 

Adopted and effective as of January 2, 2025.

 

 

Exhibit 3.3

 

CERTIFICATE OF DESIGNATIONS

 

OF

 

SERIES A NON-VOTING COMMON EQUIVALENT STOCK

 

OF

 

PALTALK, INC.

 

 

PALTALK, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the provisions of Sections 103, 141 and 151 thereof, does hereby certify that:

 

In accordance with the provisions of the Certificate of Incorporation of the Corporation, as amended from time to time (the “Charter”), the Amended and Restated Bylaws of the Corporation (the “Bylaws”) and applicable law, the Board of Directors of the Corporation (the “Board”), duly adopted the following resolution on August 9, 2024, creating a series of preferred stock of the Corporation designated as “Series A Non-Voting Common Equivalent Stock”.

 

RESOLVED, that pursuant to the Delaware General Corporation Law (the “DGCL”), the Charter and the Bylaws, the Board hereby establishes a series of preferred stock, par value $0.001 per share, of the Corporation and fixes and determines the designation, powers, preferences, redemption rights, qualifications, privileges, limitations, restrictions and special or relative rights thereof as follows:

 

Section I. Designation and Amount.

 

A series of preferred stock designated as the “Series A Non-Voting Common Equivalent Stock” (“Series A NVCE Stock”) is hereby established. The total number of authorized shares of Series A NVCE Stock shall be 9,000,000.

 

Section II. Definitions. As used herein, the following terms shall have the following meanings, unless the context otherwise requires:

 

“Adjustment Event” has the meaning specified in Section VII(a).

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person (as used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of voting securities, by contract or otherwise).

 

“Applicable Conversion Rate” means, for each share of Series A NVCE Stock, the number of shares of Common Stock equal to the quotient of (i) the Base Price divided by (ii) the then-applicable Conversion Price.

 

“Base Price” means $3.82.

 

“BHC Act” means the Bank Holding Company Act of 1956 (as amended) and its implementing regulations.

 

 

“Board” has the meaning set forth in the Preamble.

 

“Business Day” means any day, other than a Saturday, Sunday or other day on which banking institutions in the city of New York, New York are required or authorized by Law to be closed.

 

“Bylaws” has the meaning set forth in the Preamble.

 

“Certificate of Designations” means this Certificate of Designations of Series A NVCE Stock of the Corporation, dated December 30, 2024.

 

“Charter” has the meaning set forth in the Preamble.

 

“Class of Voting Securities” shall be interpreted in a manner consistent with how “class of voting shares” is defined in 12 C.F.R. Section 225.2(q)(3) or any successor provision.

 

“Closing Date” means the date that any shares of Series A NVCE Stock are first issued.

 

“Closing Price” of the Common Stock (or other relevant capital stock or equity interest) on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock (or other relevant capital stock or equity interest) on Nasdaq on such date. If the Common Stock (or other relevant capital stock or equity interest) is not traded on Nasdaq on any date of determination, the Closing Price of the Common Stock (or other relevant capital stock or equity interest) on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or if the Common Stock (or other relevant capital stock or equity interest) is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock (or other relevant capital stock or equity interest) in the over-the-counter market as reported by OTC Markets Group Inc. or a similar organization, or, if that bid price is not available, the market price of the Common Stock (or other relevant capital stock or equity interest) on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose.

 

For purposes of this Certificate of Designations, all references herein to the “Closing Price” and “last reported sale price” of the Common Stock (or other relevant capital stock or equity interest) on Nasdaq shall be such closing sale price and last reported sale price as reflected on the website of Nasdaq (http://www.nasdaq.com) and as reported by Bloomberg Professional service; provided that in the event that there is a discrepancy between the closing sale price or last reported sale price as reflected on the website of Nasdaq and as reported by Bloomberg Professional service, the closing sale price and last reported sale price on the website of Nasdaq shall govern.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Corporation authorized by the Corporation on or after the date hereof.

 

“Conversion Date” means the date on which any shares of Series A NVCE Stock shall become convertible into any shares of Common Stock pursuant to Section III(a); provided, however, that if a Conversion Date would otherwise occur on or after an Ex-Date for an issuance, dividend or distribution that results in an adjustment of the Conversion Price pursuant to Section VII and on or before the Record Date for such issuance, dividend or distribution, such Conversion Date shall instead occur on the first calendar day after the Record Date for such issuance, dividend or distribution.

 

 

“Conversion Price” means, for each share of Series A NVCE Stock, the Base Price, as the same may be adjusted from time to time in accordance with the terms of this Certificate of Designations.

 

“Convertible Transfer” means a transfer by the Holder that is both (i) to a Person who is not an affiliate of the Holder for purposes of the BHC Act and (ii) (A) to the Corporation; (B) in a widespread public distribution; (C) in which no transferee (or group of associated transferees) would receive 2% or more of the outstanding securities of any Class of Voting Securities of the Corporation; or (D) to a purchaser that would control more than 50% of every Class of Voting Securities of the Corporation without any transfer from the Holder.

 

“Corporation” has the meaning set forth in the Preamble.

 

“Current Market Price” means, on any date, the average of the daily Closing Price per share of the Common Stock or other securities on each of the five consecutive Trading Days preceding the earlier of the day before the date of the issuance, dividend or distribution in question and the day before the Ex-Date with respect to the issuance or distribution, giving rise to an adjustment to the Conversion Price pursuant to Section VII.

 

“DGCL” has the meaning set forth in the Preamble.

 

“Exchange Property” has the meaning specified in Section VII(i).

 

“Ex-Date” means, when used with respect to any issuance, dividend or distribution giving rise to an adjustment to the Conversion Price pursuant to Section VII, the first date on which the applicable Common Stock or other securities trade without the right to receive the issuance, dividend or distribution.

 

“Government Entity” means any (a) federal, state, local, municipal, foreign or other government; (b) governmental entity of any nature (including any governmental agency, branch, department, official, committee or entity and any court or other tribunal), whether foreign or domestic; or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, whether foreign or domestic, including any arbitral tribunal and self-regulatory organizations.

 

“Holder” means the Person in whose name any shares of Series A NVCE Stock are registered, which may be treated by the Corporation as the absolute owner of such shares of Series A NVCE Stock for the purpose of making payment and settling conversion and for all other purposes.

 

“Law” means, with respect to any Person, any legal, regulatory and administrative laws, statutes, rules, Orders and regulations applicable to such Person.

 

“Liens” means any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, understandings or arrangements, or other restrictions on title or transfer of any nature whatsoever.

 

“Merger Agreement” means that certain agreement and plan of merger, by and among the Corporation, PALT Merger Sub 1, Inc., PALT Merger Sub 2, LLC, Newtek Technology Solutions, Inc. and NewtekOne, Inc., dated as of August 11, 2024 (as amended, supplemented or restated from time to time).

 

“Nasdaq” means The Nasdaq Stock Market, LLC.

 

“NVCE Dividend Amount” has the meaning specified in Section IV(a).

 

 

“Order” means any applicable order, injunction, judgment, decree, ruling, or writ of any Government Entity.

 

“Person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as amended), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

 

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other property or in which the Common Stock is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board or a duly authorized committee of the Board or by Law, contract or otherwise).

 

“Reorganization Event” has the meaning specified in Section VII(i)(ii).

 

“Series A NVCE Stock” has the meaning specified in Section I.

 

“Subject Series A Share” has the meaning set forth in Section III(a).

 

“Trading Day” means a day on which the shares of Common Stock:

 

(i) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and

 

(ii) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

 

Section III. Conversion.

 

(a) Conversion upon Convertible Transfer.

 

(i) The shares of Series A NVCE Stock shall not be convertible into any other class or series of capital stock of the Corporation, except in accordance with this Section III. On the terms and in the manner set forth in this Section III, upon the consummation of any Convertible Transfer of shares of Series A NVCE Stock, each outstanding share of Series A NVCE Stock subject to such Convertible Transfer (each, a “Subject Series A Share”) shall automatically convert into a number of shares of Common Stock equal to the Applicable Conversion Rate.

 

(ii) On the Conversion Date, the Corporation shall effect the conversion of the Subject Series A Shares by delivering the shares of Common Stock so converted pursuant to Section III(a)(i).

 

(b) Prior to the close of business on any applicable Conversion Date, the shares of Common Stock issuable upon conversion of any shares of Series A NVCE Stock pursuant to Section III(a)(i) shall not be deemed outstanding for any purpose, and the Holders shall have no rights with respect to the Common Stock (including voting rights, rights to respond to tender offers for the Common Stock, and rights to receive any dividends or other distributions on the Common Stock) by virtue of holding shares of Series A NVCE Stock, except as otherwise expressly set forth in this Certificate of Designations.

 

 

(c) Effective immediately prior to the close of business on any applicable Conversion Date, the rights of the Holders with respect to the shares of the Series A NVCE Stock so converted shall cease and the Persons entitled to receive shares of Common Stock upon the conversion of such shares of Series A NVCE Stock shall be treated for all purposes as having become the record and beneficial owners of such shares of Common Stock. In the event that the Holders shall not by written notice to the Corporation designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Series A NVCE Stock should be registered or paid or the manner in which such shares should be delivered, the Corporation shall be entitled to register and deliver such shares, and make such payment, in the name of the Holders and in the manner shown on the records of the Corporation.

 

(d) No fractional shares of Common Stock shall be issued upon any conversion of shares of Series A NVCE Stock. If more than one share of Series A NVCE Stock shall be surrendered for conversion at any one time by the same Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A NVCE Stock so surrendered. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any Subject Series A Share, the Corporation shall pay an amount in cash (rounded to the nearest cent) equal to the fractional share of Common Stock, that otherwise would be issuable hereunder, multiplied by the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the applicable Conversion Date.

 

(e) All shares of Common Stock which may be issued upon conversion of the shares of Series A NVCE Stock will, upon issuance by the Corporation, be duly authorized, validly issued, fully paid and non-assessable, free and clear of all Liens (other than transfer restrictions imposed under applicable securities Laws) and not issued in violation of any preemptive right or Law.

 

(f) Effective immediately prior to the Conversion Date, dividends or distributions shall no longer be declared on any Subject Series A Shares and such shares shall cease to be outstanding, in each case, subject to the rights of a Holder to receive any declared and unpaid dividends or distributions on such shares and any other payments to which they are otherwise entitled pursuant to Section IV or Section VII.

 

Section IV. Dividend Rights.

 

(a) From and after the Closing Date to (but excluding) the applicable Conversion Date, (i) the Holders shall be entitled to receive, when, as and if declared by the Board or any duly authorized committee of the Board (but only out of assets legally available therefor under the DGCL) all cash dividends or distributions (including regular quarterly dividends or distributions) declared and paid or made in respect of the Common Stock, at the same time and on the same terms as holders of Common Stock, in an amount per share of Series A NVCE Stock equal to the product of (x) the Applicable Conversion Rate then in effect and (y) any per share dividend or distribution, as applicable, declared and paid or made in respect of each share of Common Stock (the “NVCE Dividend Amount”), and (ii) the Board or any duly authorized committee thereof may not declare and pay any cash dividend or make any cash distribution in respect of Common Stock unless the Board or any duly authorized committee of the Board declares and pays to the Holders, at the same time and on the same terms as holders of Common Stock, the NVCE Dividend Amount per share of Series A NVCE Stock. Notwithstanding any provision in this Section IV(a) to the contrary, no Holder of a share of Series A NVCE Stock shall be entitled to receive any dividend or distribution made with respect to the Common Stock where the Record Date for determination of holders of Common Stock entitled to receive such dividend or distribution occurs prior to the date of issuance of such share of Series A NVCE Stock. The foregoing shall not limit or modify the rights of any Holder to receive any dividend or other distribution pursuant to Section VII.

 

 

(b) Each dividend or distribution declared and paid pursuant to Section IV(a) will be payable to Holders of record of shares of Series A NVCE Stock as they appear in the records of the Corporation at the close of business on the same day as the Record Date for the corresponding dividend or distribution to the holders of shares of Common Stock.

 

(c) Except as set forth in this Certificate of Designations, the Corporation shall have no obligation to pay, and Holders shall have no right to receive, dividends or distributions at any time, including with respect to dividends or distributions with respect to any other class or series of authorized preferred stock. To the extent the Corporation declares dividends or distributions on the Series A NVCE Stock and on any Common Stock but does not make full payment of such declared dividends or distributions, the Corporation will allocate the dividend payments on a pro rata basis among the Holders and the holders of any Common Stock then outstanding. For purposes of calculating the allocation of partial dividend payments, the Corporation will allocate dividend payments on a pro rata basis among the Holders and the holders of any Common Stock so that the amount of dividends or distributions paid per share on the shares of Series A NVCE Stock and such Common Stock shall in all cases bear to each other the same ratio that payable dividends or distributions per share on the shares of the Series A NVCE Stock and such Common Stock (but without, in the case of any noncumulative preferred stock, accumulation of dividends or distributions for prior dividend periods) bear to each other. The foregoing right shall not be cumulative and shall not in any way create any claim or right in favor of Holders in the event that dividends or distributions have not been declared or paid in respect of any prior calendar quarter.

 

(d) No interest or sum of money in lieu of interest will be payable in respect of any dividend payment or payments on shares of Series A NVCE Stock that may be in arrears.

 

(e) Holders shall not be entitled to any dividends or distributions, whether payable in cash, securities or other property, other than dividends or distributions (if any) declared and payable on shares of Series A NVCE Stock as specified in this Certificate of Designations.

 

(f) Notwithstanding any provision in this Certificate of Designations to the contrary, Holders shall not be entitled to receive any dividends or distributions on any shares of Series A NVCE Stock on or after the applicable Conversion Date in respect of such shares of Series A NVCE Stock that have been converted as provided herein, except to the extent that any such dividends or distributions have been declared by the Board or any duly authorized committee of the Board and the Record Date for such dividend occurs prior to such applicable Conversion Date.

 

Section V. Voting.

 

(a) Notwithstanding any stated or statutory voting rights, except as set forth in Section V(b), the Holders shall not be entitled to vote (in their capacity as Holders) on any matter submitted to a vote of the stockholders of the Corporation.

 

(b) So long as any shares of Series A NVCE Stock are outstanding, the Corporation shall not, without the written consent or affirmative vote, given in person or by proxy, at a meeting called for that purpose by holders of at least a majority of the outstanding shares of Series A NVCE Stock, voting as a single and separate class, amend, alter or repeal (including by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions, other than a Reorganization Event pursuant to which the Series A NVCE Stock is treated in accordance with Section VII(i)) any provision of (i) this Certificate of Designations or (ii) the Charter, in either case, that would alter, modify or change the preferences, rights, privileges or powers of the Series A NVCE Stock so as to, or in a manner that would, significantly and adversely affect the preferences, rights, privileges or powers of the Series A NVCE Stock; provided, that any such amendment or alteration to any provision of this Certificate of Designations or the Charter that alters, modifies or changes the preferences, rights, privileges or powers of a particular Holder so as to, or in a manner that would, significantly and adversely affect the preferences, rights, privileges or powers of such Holder in a manner disproportionate from any other Holder shall require the prior written consent of such significantly and adversely affected Holder; provided, further, that neither (x) any increase in the amount of the authorized or issued Series A NVCE Stock or any securities convertible into Series A NVCE Stock nor (y) the creation and issuance, or an increase in the authorized or issued amount, of any class or series of preferred stock, or any securities convertible into preferred stock, ranking on a parity with and/or junior to the Series A NVCE Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Corporation’s liquidation, dissolution or winding up, in either case, will, in and of itself, be deemed to significantly and adversely affect the preferences, rights, privileges or powers of the Series A NVCE Stock or any Holder, and the Holders will have no right to vote their shares of Series A NVCE Stock or consent to such action solely by reason of such an increase, creation or issuance.

 

 

(c) Notwithstanding the foregoing, the Corporation shall not, without the written consent or affirmative vote, given in person or by proxy, at a meeting called for that purpose by the unanimous consent of the holders of the outstanding shares of Series A NVCE Stock, amend, alter or repeal (including by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions, other than a Reorganization Event pursuant to which the Series A NVCE Stock is treated in accordance with Section VII(i)) the definitions of Base Price, Conversion Price or Applicable Conversion Rate under this Certificate of Designations.

 

(d) Notwithstanding the foregoing, the Holders shall not have any voting rights set out in Section V(b) if, at or prior to the effective time of the act with respect to which such vote would otherwise be required, all outstanding shares of Series A NVCE Stock shall have been converted into shares of Common Stock.

 

Section VI. Liquidation.

 

(a) Subject to the terms hereof, the Series A NVCE Stock shall rank equally with the Common Stock with respect to dividends or distributions (including regular quarterly dividends) declared by the Board and rights upon any liquidation, dissolution, winding up or similar proceeding of the Corporation, as provided in the Charter; provided, that, in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, Holders shall be entitled to receive, in preference to the holders of the Common Stock, an amount per share equal to $0.0001.

 

(b) For purposes of this Section VI, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Corporation shall not be deemed a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, nor shall the merger, consolidation or any other business combination transaction of the Corporation into or with any other corporation or Person or the merger, consolidation or any other business combination of any other corporation or Person into or with the Corporation be deemed to be a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation.

 

Section VII. Adjustments.

 

(a) The Conversion Price shall be subject to the adjustments described in this Section VII (each such event set forth in Section VII(b) through Section VII(i), an “Adjustment Event”).

 

 

(b) Stock Dividends and Distributions. If the Corporation pays dividends or other distributions on the Common Stock in shares of Common Stock, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time on the Trading Day immediately prior to the Ex-Date for such dividend or distribution by the following fraction:

 

	OS0
	OS1

 

Where,

 

OS0	=	the number of shares of Common Stock outstanding immediately prior to Ex-Date for such dividend or distribution.
OS1	=	the sum of (x) the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution, plus (y) the total number of shares of Common Stock issued in such dividend or distribution.

 

The adjustment pursuant to this Section VII(b) shall become effective at 9:00 a.m., New York City time on the Ex-Date for such dividend or distribution. For the purposes of this Section VII(b), the number of shares of Common Stock at the time outstanding shall not include shares held in treasury by the Corporation. If any dividend or distribution described in this Section VII(b) is declared but not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board publicly announces its decision not to make such dividend or distribution, to such Conversion Price that would be in effect if such dividend or distribution had not been declared.

 

(c) Subdivisions, Splits and Combinations of Common Stock. If the Corporation subdivides, splits or combines the shares of Common Stock, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time on the Trading Day immediately prior to the effective date of such share subdivision, split or combination by the following fraction:

 

	OS0
	OS1

 

Where,

 

OS0	=	the number of shares of Common Stock outstanding immediately prior to the effective date of such share subdivision, split or combination.
OS1	=	the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share subdivision, split or combination.

 

The adjustment pursuant to this Section VII(c) shall become effective at 9:00 a.m., New York City time on the effective date of such subdivision, split or combination. For the purposes of this Section VII(c), the number of shares of Common Stock at the time outstanding shall not include shares held in treasury by the Corporation. If any subdivision, split or combination described in this Section VII(c) is announced but the outstanding shares of Common Stock are not subdivided, split or combined, the Conversion Price shall be readjusted, effective as of the date the Board publicly announces its decision not to subdivide, split or combine the outstanding shares of Common Stock, to such Conversion Price that would be in effect if such subdivision, split or combination had not been announced.

 

 

(d) Issuance of Stock Purchase Rights. If the Corporation issues to all or substantially all holders of the shares of Common Stock rights or warrants (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them, for a period of up to 45 days from the date of issuance of such rights or warrants, to subscribe for or purchase the shares of Common Stock at less than the Current Market Price on the date immediately preceding the Ex-Date for such issuance, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time on the Trading Day immediately prior to the Ex-Date for such issuance by the following fraction:

 

	OS0 + Y
	OS0 + X

 

Where,

 

OS0	=	the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such distribution.
X	=	the total number of shares of Common Stock issuable pursuant to such rights or warrants.
Y	=	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the Current Market Price on the date immediately preceding the Ex-Date for the issuance of such rights or warrants.

 

Any adjustment pursuant to this Section VII(d) shall become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such issuance. For the purposes of this Section VII(d), the number of shares of Common Stock at the time outstanding shall not include shares held in treasury by the Corporation. The Corporation shall not issue any such rights or warrants in respect of shares of the Common Stock held in treasury by the Corporation. In the event that such rights or warrants described in this Section VII(d) are not so issued, the Conversion Price shall be readjusted, effective as of the date the Board publicly announces its decision not to issue such rights or warrants, to the Conversion Price that would then be in effect if such issuance had not been declared. To the extent that such rights or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Price shall be readjusted to such Conversion Price that would then be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered. In determining the aggregate offering price payable for such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration (if other than cash, to be reasonably determined by the Board).

 

(e) Debt or Asset Distributions. If the Corporation distributes to all or substantially all holders of shares of Common Stock evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in Section VII(b), any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of certain spin-off transactions as described below), then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time on the Trading Day immediately prior to the Ex-Date for such distribution by the following fraction:

 

	SP0 – FMV
	SP0

 

Where,

 

SP0	=	the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such distribution.
FMV	=	the fair market value of the portion of the distribution applicable to one share of Common Stock on such date as reasonably determined by the Board; provided that, if “FMV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall receive on the date on which such distribution is made to holders of Common Stock, for each share of Series A NVCE Stock, the amount of such distribution such Holder would have received had such holder owned a number of shares of Common Stock equal to the Applicable Conversion Rate on the Ex-Date for such distribution.

 

 

In a “spin-off”, where the Corporation makes a distribution to all holders of shares of Common Stock consisting of capital stock of any class or series, or similar equity interests of, or relating to, a subsidiary or other business unit, if a Holder did not participate in such distribution with respect to such shares of Series A NVCE Stock as provided for in Section IV, the Conversion Price with respect to such share held by such Holder will be adjusted on the 15th Trading Day after the effective date of the distribution by multiplying such Conversion Price in effect immediately prior to such 15th Trading Day by the following fraction:

 

	MP0
	MP0 + MPs

 

Where,

 

MP0	=	the average of the Closing Prices of the Common Stock over the first 10 Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution.
MPs	=	the average of the Closing Prices of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock over the first 10 Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution, or, if not traded on a national or regional securities exchange or over-the-counter market, the fair market value of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock on such date as reasonably determined by the Board.

 

Any adjustment pursuant to this Section VII(e) shall become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such distribution. In the event that such distribution described in this Section VII(e) is not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board publicly announces its decision not to pay or make such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared.

 

(f) Cash Distributions. If the Corporation makes a distribution consisting exclusively of cash to all holders of Common Stock, excluding any (i) cash dividend on the Common Stock to the extent a corresponding cash dividend is paid on the Series A NVCE Stock pursuant to Section IV(a), (ii) cash that is distributed in a Reorganization Event or as part of a “spin-off” referred to in Section VII(e), (iii) dividend or distribution in connection with the Corporation’s liquidation, dissolution or winding-up, and (iv) consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, then in each event, the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

 

	SP0 – DIV
	SP0

 

Where,

 

SP0	=	the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date.
DIV	=	the amount per share of Common Stock of the cash distribution, as determined pursuant to the introduction to this Section VII(f).

 

 

In the event that any distribution described in this Section VII(f) is not so made, the Conversion Price shall be readjusted, effective as of the date the Board publicly announces its decision not to pay such distribution, to the Conversion Price which would then be in effect if such distribution had not been declared.

 

Notwithstanding the foregoing, if “DIV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive on the date on which the relevant cash dividend or distribution is distributed to holders of Common Stock, for each share of Series A NVCE Stock, the amount of cash such Holder would have received had such holder owned a number of shares of Common Stock equal to the Applicable Conversion Rate on the Ex-Date for such distribution.

 

(g) Self-Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries successfully completes a tender or exchange offer for the Common Stock where the cash and the value of any other consideration included in the payment per share of the Common Stock exceeds the Closing Price per share of the Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time prior to the commencement of the offer by the following fraction:

 

	OS0 x SP0
	AC + (SP0 x OS1)

 

Where,

 

SP0	=	the Closing Price per share of Common Stock on the Trading Day immediately succeeding the commencement of the tender or exchange offer.
OS0	=	the number of shares of Common Stock outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.
OS1	=	the number of shares of Common Stock outstanding immediately after the expiration of the tender or exchange offer (after giving effect to such tender offer or exchange offer).
AC	=	the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as reasonably determined by the Board.

 

Any adjustment made pursuant to this Section VII(g) shall become effective immediately prior to 9:00 a.m., New York City time, on the Trading Day immediately following the expiration of the tender or exchange offer. In the event that the Corporation or one of its subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Corporation or such subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Price shall be readjusted to be such Conversion Price that would then be in effect if such tender offer or exchange offer had not been made.

 

(h) Rights Plans. To the extent that the Corporation has a rights plan in effect with respect to the Common Stock on any Conversion Date, upon conversion of any shares of the Series A NVCE Stock, the Holders will receive, in addition to the shares of Common Stock, the rights under the rights plan, unless, prior to such Conversion Date, the rights have separated from the shares of Common Stock, in which case the Conversion Price will be adjusted at the time of separation as if the Corporation had made a distribution to all holders of Common Stock as described in Section VII(e), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

 

(i) Reorganization Events.

 

(i) Upon the occurrence of a Reorganization Event prior to an applicable Conversion Date, each share of Series A NVCE Stock outstanding immediately prior to such Reorganization Event shall, without the consent of Holders, automatically convert into the types and amounts of securities, cash, and other property that is or was receivable in such Reorganization Event by a holder (other than the counterparty to the Reorganization Event or an Affiliate of such other party) of the number of shares of Common Stock into which such share of Series A NVCE Stock was convertible immediately prior to such Reorganization Event in exchange for such shares of Series A NVCE Stock (such securities, cash, and other property, the “Exchange Property”); provided that, to the extent receipt of any Exchange Property would be prohibited by Law or would require the Holder to obtain any consent, authorization, approval, license or permit of any Governmental Entity to acquire or hold the Exchange Property, then the portion of the Series A NVCE Stock of such Holder that such Holder is prohibited by Law or requires such action to acquire or hold shall instead either (A) convert into a substantially identical non-voting security (with commensurate voting powers and conversion rights as the Series A NVCE Stock hereunder) of the entity surviving such Reorganization Event or other entity in which holders of shares of Common Stock receive securities in connection with such Reorganization Event or (B) if proper provision is not made to give effect to the foregoing subclause (A), remain outstanding without any alterations to the terms thereof and be convertible into the Exchange Property.

 

(ii) A “Reorganization Event” shall mean:

 

(1) any consolidation, merger, conversion or other similar business combination of the Corporation with or into another Person, in each case, pursuant to which all or substantially all of the Common Stock outstanding will be converted into cash, securities, or other property of the Corporation or another Person;

 

(2) any sale, transfer, lease, or conveyance to another Person of all or substantially all of the property and assets of the Corporation and its subsidiaries, taken as a whole, in each case pursuant to which all of the Common Stock outstanding will be converted into cash, securities, or other property of the Corporation or another Person;

 

(3) any reclassification of the Common Stock into securities other than the Common Stock; or

 

(4) any statutory exchange of all of the outstanding shares of Common Stock for securities of another Person (other than in connection with a merger or acquisition).

 

(iii) In the event that holders of the shares of the Common Stock have the opportunity to elect the form of consideration to be received in such Reorganization Event, the Corporation shall ensure that the Holders have the same opportunity to elect the form of consideration in accordance with the same procedures and pro ration mechanics that apply to the election to be made by the holders of the Common Stock. The amount of Exchange Property receivable upon conversion of any Series A NVCE Stock shall be determined based upon the Conversion Price in effect on the date on which such Reorganization Event is consummated.

 

(iv) The provisions of this Section VII(i) shall similarly apply to successive Reorganization Events or any series of transactions that results in a Reorganization Event and the provisions of Section VII(i) shall apply to any shares of capital stock of the Corporation (or any successor) received by the holders of the Common Stock in any such Reorganization Event.

 

 

(v) The Corporation (or any successor) shall, at least twenty (20) days prior to the occurrence of any Reorganization Event, use reasonable best efforts to provide written notice to the Holders of the anticipated occurrence of such event and of the type and amount of the cash, securities or other property that constitutes the Exchange Property; provided, that no such notice shall be required if the anticipated occurrence of any Reorganization Event is disclosed in any registration statement, prospectus, report, schedule or proxy statement publicly filed with or furnished by the Corporation to the U.S. Securities and Exchange Commission. Failure to deliver such notice shall not affect the operation of this Section VII.

 

(vi) The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless such agreement provides for the conversion of the Series A NVCE Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section VII(i).

 

(j) No adjustment to the Conversion Price shall be made with respect to a share of Series A NVCE Stock if the Holder thereof has participated in the transaction that would otherwise give rise to an adjustment with respect to such share of Series A NVCE Stock, as a result of holding such share of Series A NVCE Stock at the time of such transaction (including pursuant to Section IV), without having to convert such share of Series A NVCE Stock, as if they held the full number of shares of Common Stock into which each such share of the Series A NVCE Stock held by them may then be converted.

 

(k) Notwithstanding anything to the contrary herein, an Adjustment Event shall not allow the Holder to acquire a higher percentage of any Class of Voting Securities of the Corporation than the Holder (together with its affiliates for purposes of the BHC Act) beneficially owned immediately prior to such Adjustment Event.

 

Section VIII. Reports as to Adjustments.

 

Whenever the number of shares of Common Stock into which the shares of the Series A NVCE Stock are convertible is adjusted as provided in Section VII, the Corporation shall promptly, but in any event within 10 days thereafter, compute such adjustment and furnish to the Holders a notice stating the number of shares of Common Stock into which each share of the Series A NVCE Stock is convertible as a result of such adjustment, a brief statement of the facts requiring such adjustment and the computation thereof and when such adjustment will become effective. Amounts resulting from any calculation hereunder will be rounded to the nearest 1/10,000th.

 

Section IX. Reservation of Stock.

 

(a) The Corporation shall reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of shares of Series A NVCE Stock as provided in this Certificate of Designations, free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series A NVCE Stock then outstanding.

 

(b) Following the approval of the applicable supplemental listing application with Nasdaq, the Corporation hereby covenants and agrees that, for so long as shares of the Common Stock are listed on Nasdaq or any other national securities exchange or automated quotation system, the Corporation will, if permitted by the rules of such exchange or automated quotation system, list and keep listed that number of shares of Common Stock issuable upon conversion of shares of all the Series A NVCE Stock.

 

 

Section X. Exclusion of Other Rights.

 

The shares of Series A NVCE Stock shall not have any voting powers except as expressly described herein, and, except as may otherwise be required by Law, shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth herein (as this Certificate of Designations may be amended from time to time) and in the Charter. The shares of Series A NVCE Stock shall have no preemptive or subscription rights.

 

Section XI. Severability of Provisions.

 

If any voting powers, preferences or relative, participating, optional or other special rights of the Series A NVCE Stock and qualifications, limitations and restrictions thereof set forth in this Certificate of Designations (as this Certificate of Designations may be amended from time to time) are invalid, unlawful or incapable of being enforced by reason of any rule of Law, all other voting powers, preferences and relative, participating, optional and other special rights of Series A NVCE Stock and qualifications, limitations and restrictions thereof set forth in this Certificate of Designations (as so amended) which can be given effect without the invalid, unlawful or unenforceable voting powers, preferences or relative, participating, optional or other special rights of Series A NVCE Stock and qualifications, limitations and restrictions thereof shall, nevertheless, remain in full force and effect, and no voting powers, preferences or relative, participating, optional or other special rights of Series A NVCE Stock or qualifications, limitations and restrictions thereof herein set forth shall be deemed dependent upon any other such voting powers, preferences or relative, participating, optional or other special rights of Series A NVCE Stock or qualifications, limitations and restrictions thereof unless so expressed herein.

 

Section XII. Cancellation of Series A NVCE Stock.

 

Any shares of Series A NVCE Stock that have been duly converted in accordance with this Certificate of Designations, or reacquired by the Corporation, shall be cancelled promptly thereafter and revert to authorized but unissued shares of preferred stock undesignated as to series. Such shares may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock. The Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized number of shares of Series A NVCE Stock solely in accordance with the foregoing.

 

Section XIII. Additional Authorized Shares.

 

Notwithstanding anything set forth in the Charter or this Certificate of Designations to the contrary, the Board or any authorized committee of the Board, without the vote of the Holders, may increase or decrease the number of authorized shares of Series A NVCE Stock or other stock ranking junior or senior to, or on parity with, the Series A NVCE Stock as to dividends and the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

 

Section XIV. Determinations.

 

The Corporation shall have the sole right to make all calculations called for hereunder. Absent fraud or manifest error, such calculations shall be final and binding on all Holders. The Corporation shall have the power to resolve any ambiguity and its action in so doing, as evidenced by a resolution of the Board, shall be final and conclusive unless clearly inconsistent with the intent hereof. Amounts resulting from any calculation will be rounded, if necessary, to the nearest one ten-thousandth, with five one-hundred thousandths being rounded upwards.

 

 

Section XV. Maturity.

 

The Series A NVCE Stock shall be perpetual, unless converted in accordance with this Certificate of Designations.

 

Section XVI. Repurchases.

 

Subject to the limitations imposed herein, the Corporation may purchase and sell shares of Series A NVCE Stock from time to time to such extent, in such manner, and upon such terms as the Board or any duly authorized committee of the Board may determine.

 

Section XVII. No Sinking Fund.

 

Shares of Series A NVCE Stock are not subject to the operation of a sinking fund.

 

Section XVIII. Notices.

 

All notices, demands or other communications to be given hereunder shall be in writing and shall be deemed to have been given (a) on the date of delivery if delivered personally to the recipient, or if by email, upon delivery (provided that no auto-generated error or non-delivery message is generated in response thereto), (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to (i) if to the Corporation, Paltalk, Inc., 30 Jericho Executive Plaza, Suite 400E, Jericho, NY, 11753, Attention: Chief Executive Officer, Email: jkatz@paltalk.com; with a copy to: Haynes and Boone, LLP, 2801 N. Harwood Street, Suite 2300, Dallas, Texas, 75201, Attention: Greg Samuel, Email: greg.samuel@haynesboone.com or (ii) if to any Holder or holder of Common Stock, as the case may be, to such Holder or holder at the address listed in the stock record books of the Corporation, or, in each case, such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party.

 

Section XIX. Taxes.

 

(a) The Corporation and each Holder shall bear their own costs, fees and expenses in connection with any conversion contemplated by Section III(a)(i), except that the Corporation shall pay any and all transfer taxes, stamp taxes or duties, documentary taxes, or other similar taxes in connection with, or arising by reason of, any issuance or delivery of shares of Series A NVCE Stock or Common Stock or other securities issued on account of Series A NVCE Stock pursuant hereto, including in connection with any conversion contemplated by Section III(a)(i); provided that the Corporation shall not be required to pay any such tax that may be payable in connection with any conversion contemplated by Section III(a)(i) to the extent such tax is payable because a registered holder of Series A NVCE Stock requests Common Stock to be registered in a name other than such registered holder’s name and no such Common Stock will be so registered unless and until the registered holder making such request has paid such taxes to the Corporation or has established to the satisfaction of the Corporation that such taxes have been paid or are not payable.

 

 

(b) The Corporation and each Holder agree that (i) it is intended that the Series A NVCE Stock does not constitute “preferred stock” within the meaning of Section 305 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder and (ii) except to the extent otherwise required by a “determination” within the meaning of Section 1313(a) of the Code, neither the Corporation nor any Holder shall treat the Series A NVCE Stock as such for United States federal income tax or withholding tax purposes or otherwise take any position inconsistent with such treatment.

 

(c) Notwithstanding anything herein to the contrary, the Corporation shall be entitled to deduct and withhold from any consideration otherwise payable on or with respect to the Series A NVCE Stock such amounts as it is required to deduct or withhold with respect to the making of such payment under the Code, or any other applicable tax Law. The Corporation and each Holder shall reasonably cooperate with each other to minimize or eliminate to the extent permissible under applicable Laws the amount of any such deduction or withholding. If any amounts are so deducted or withheld and subsequently paid to the applicable Government Entity, such deducted or withheld amounts shall be treated for all purposes hereunder as having been paid to the person to which such amounts would have otherwise been payable.

 

Section XX. No Stock Certificates.

 

Notwithstanding anything to the contrary contained in this Certificate of Designations, no shares of Series A NVCE Stock shall be issued in physical, certificated form. All shares of Series A NVCE Stock shall be evidenced by book-entry on the record books maintained by the Corporation or its transfer agent.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed by the undersigned on this 30th day of December, 2024.

 

PALTALK, INC.
By:	/s/ Jason Katz
	Name:	Jason Katz
	Title:	Chief Executive Officer

 

[Signature Page to Certificate of Designations]

 

 

Exhibit 10.1

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of January 2, 2025, by and between Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”), and NewtekOne, Inc., a Maryland corporation (“Newtek”). The Company and Newtek are sometimes collectively referred to herein as the “Parties” and individually as a “Party.” Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement (as defined below).

 

WHEREAS, the Company, Newtek, Newtek Technology Solutions, Inc., a New York corporation and wholly owned subsidiary of Newtek (“NTS”), PALT Merger Sub 1, Inc., a New York corporation and direct, wholly owned subsidiary of the Company (“Merger Sub I”), PALT Merger Sub 2, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of the Company (“Merger Sub II”), entered into that certain Agreement and Plan of Merger, dated as of August 11, 2024 (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which (a) Merger Sub I merged with and into NTS, with NTS continuing as the surviving entity (the “Interim Surviving Entity”) (such merger begin referred to herein as the “First Step Merger”), and (b) immediately following the consummation of the First Step Merger, the Interim Surviving Entity merged with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Step Merger” and, together with the First Step Merger, the “Mergers”);

 

WHEREAS, as partial consideration in the Mergers, the Company (i) issued Newtek 4,000,000 shares (the “Closing Stock Consideration”) of Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the “Company Preferred Stock”), and (ii) agreed to issue to Newtek a number of shares of Company Preferred Stock pursuant to Section 3.6 of the Merger Agreement based on certain financial metrics of the Company for the 2025 and 2026 fiscal years (the “Earn-Out Stock Consideration Amount” and, together with the Closing Stock Consideration, the “Subject Preferred Stock”); and

 

WHEREAS, pursuant to the terms of the Merger Agreement, among other things, the Company has agreed to provide registration rights with respect to the Registrable Securities underlying the Closing Stock Consideration and the Earn-Out Stock Consideration Amount, if any.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Section 1. Resale Registration.

 

(a) As soon as practicable following the Closing (as defined in the Merger Agreement), the Company shall use its reasonable best efforts to file with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 or any similar short-form registration statement, in each case, covering the resale of all the Registrable Securities (as determined as of two (2) Business Days prior to such filing) (any such registration statement filed pursuant to this Section 1(a), a “Resale Shelf”); provided that the Parties acknowledge and agree that the sale of any Registrable Securities registered under such Resale Shelf may be subject to restrictions imposed by this Agreement and/or applicable securities laws. Such Resale Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, Newtek.

 

 

(b) The Company agrees to use reasonable best efforts to cause such Resale Shelf, or another shelf registration statement that includes all Registrable Securities, to (i) become effective as soon as reasonably practicable following the filing thereof and (ii) remain effective until the date on which Newtek ceases to hold any Registrable Securities (the “Effectiveness Obligation Period”). Notwithstanding the foregoing, if the Commission prevents the Company from including any or all of the Registrable Securities proposed to be registered under a Resale Shelf due to limitations on the use of Rule 415 of the Securities Act for the resale of Registrable Securities by Newtek, such Resale Shelf shall register for resale the maximum number of Registrable Securities as is permitted. In the event the number of Registrable Securities to be registered for Newtek is reduced, as promptly as practicable after being permitted to register additional Registrable Securities under Rule 415 under the Securities Act, the Company shall amend the Resale Shelf or file a new Resale Shelf to register such Registrable Securities not included in the initial Resale Shelf and use its reasonable best efforts to cause such amendment or Resale Shelf to become effective as promptly as practicable.

 

(c) The Company shall use its reasonable best efforts to keep all such Resale Shelfs filed pursuant to this Section 1 continuously effective under the Securities Act, including by filing successive replacement or renewal registration statements in accordance with this Section 1, in order to permit the prospectus forming a part thereof to be usable by Newtek until the earlier of (i) the expiration of the Effectiveness Obligation Period and (ii) such shorter period as the Parties may agree in writing.

 

(d) At any time and from time to time that a Resale Shelf is effective, if Newtek requests the registration under the Securities Act of additional Registrable Securities pursuant to such Resale Shelf, the Company shall as promptly as practicable amend or supplement the Resale Shelf to cover such additional Registrable Securities.

 

(e) Notwithstanding anything herein to the contrary, if the Company determines (in its sole discretion) that it is not able to register all of the Registrable Securities on Form S-3 or any similar short-form registration statement, then in lieu of filing one or more Resale Shelfs with the Commission registering the resale of the Registrable Securities, the Company will file a registration statement on Form S-1 or any successor form or similar long-form registration statement (a “Long-Form Registration”) covering the resale of all the Registrable Securities (as determined as of two (2) Business Days prior to such filing). If a Long-Form Registration is required pursuant to this Section 1(e), the term “Resale Shelf” as used in this Agreement shall also be deemed to include such Long-Form Registration.

 

Section 2. Demand Registrations.

 

(a) Requests for Underwritten Takedowns. Subject to Section 2(b) below and the other terms and conditions of this Agreement, at any time following the effectiveness of a Resale Shelf pursuant to Section 1, Newtek may request that the Company file a prospectus, prospectus supplement or post-effective amendment, as applicable, to a Resale Shelf covering the sale of all or a portion of its Registrable Securities in an underwritten offering (each such request, a “Demand Notice”). All underwritten offerings requested pursuant to this Section 2(a) by Newtek are referred to herein as an “Underwritten Takedown.” Each Demand Notice shall specify the number of Registrable Securities requested to be offered. The Company shall include in such Underwritten Takedown (and in all related registrations and qualifications under state blue sky laws and in compliance with other registration requirements) all Registrable Securities with respect to which the Company has received a written request for inclusion therein within thirty (30) days after the Company’s receipt of the Demand Notice.

 

(b) Priority of Registrable Securities for Demand Registrations. If the managing underwriter(s) in an Underwritten Takedown advise the Company in writing that, in their reasonable opinion, the number of securities requested to be included in such offering exceeds the number of securities which marketing factors permit to be sold in such offering, then the Company shall include in such offering only that number of securities that, in the opinion of such underwriter(s), marketing factors permit to be sold in such offering, and the securities that are included in such offering shall be allocated pro rata among the respective holders thereof with the following priority: (i) first, pro rata between the securities of other persons or entities that the Company is obligated to register in a registration pursuant to separate written contractual arrangements with such persons and the Registrable Securities pursuant to Newtek’s rights under Section 2(a), and (ii) second, the securities the Company proposes to sell.

 

 

(c) Restrictions on Demand Registrations. During the Effectiveness Obligation Period, Newtek shall be entitled to a maximum of five (5) Underwritten Takedowns; provided, however that the Company shall not be obligated to effect any Underwritten Takedown within ninety (90) days after the pricing of a previous Underwritten Takedown.

 

(d) Selection of Underwriters. Newtek shall have the right to select the investment banker(s) and manager(s) to administer any Underwritten Takedown, subject to reasonable consultation with the Company.

 

Section 3. Piggyback Registrations.

 

(a) Right to Piggyback.

 

(i) If the Company proposes to register any shares of Common Stock under the Securities Act on its own account (a “Primary Registration”) or for the account of others after the one (1) year anniversary of the Closing (other than (A) pursuant to a registration on Form S-8, or any successor form, relating to equity securities issuable upon exercise of employee stock options in connection with any employee benefit or similar plan of the Company, (B) in connection with a direct or indirect business combination involving the Company and another Person, (C) for an exchange offer or offering of securities solely to the existing shareholders of the Company or its subsidiaries, (D) for a dividend reinvestment plan or similar plan or (E) pursuant to a registration statement required to be filed, pursuant to Chapter 11 of Title 11 of the United States Code and/or applicable non-bankruptcy law, in accordance with a Chapter 11 plan of an current or former equity holder of the Company, the Company shall provide notice (the “Piggyback Notice”) to Newtek at least twenty (20) Business Days prior to the anticipated filing date of the registration statement relating to such registration. Such notice shall set forth Newtek’s rights under this Section 3(a) and shall offer Newtek the opportunity to include in such registration statement the number of Registrable Securities proposed to be registered as Newtek may request (a “Piggyback Registration”), subject to the other terms and conditions of this Agreement, including, without limitation, the provisions of Section 3(c) and Section 3(d) of this Agreement. In no event shall a Piggyback Registration be considered an Underwritten Takedown for purposes of Section 2.

 

(ii) Upon the request of Newtek made within ten (10) Business Days of the Piggyback Notice (which request shall specify the number of Registrable Securities intended to be registered by Newtek) and the minimum price, if any, below which Newtek will not sell such Registrable Securities (which minimum price, if any, may be subsequently waived or changed in the discretion of Newtek), the Company shall include, or if an underwritten offering, shall cause the underwriter(s) to include, all Registrable Securities that the Company has been so requested to include by Newtek, and shall use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by Newtek, to the extent required to permit the disposition of the Registrable Securities so to be registered; provided that, if such registration involves an underwritten offering, Newtek must sell its Registrable Securities to be registered to the underwriters selected pursuant to Section (3)(d).

 

(b) Priority of Registrable Securities for Primary Piggyback Registrations. If a Piggyback Registration is an underwritten Primary Registration on behalf of the Company and the managing underwriter(s) advise the Company in writing that, in their reasonable opinion, the number of securities requested to be included in such offering exceeds the number of securities which marketing factors permit to be sold in such offering, then the Company shall include in such offering only that number of securities that in the opinion of such underwriters marketing factors permit to be sold in such offering, with priority for inclusion to be determined as follows: (i) first, the securities the Company proposes to sell, and (ii) second, pro rata between any securities entitled to registration rights pursuant to separate written contractual arrangements and the Registrable Securities requested to be included in such registration by Newtek.

 

 

(c) Priority of Registrable Securities for Secondary Piggyback Registrations. If a Piggyback Registration is an underwritten secondary offering on behalf of holders of the Company’s securities (other than holders of Registrable Securities) and the managing underwriter(s) advise the Company in writing that, in their reasonable opinion, the number of securities requested to be included in such offering exceeds the number of securities which marketing factors permit to be sold in such offering, then the Company shall include in such offering only that number of securities which in the opinion of such underwriters marketing factors permit to be sold in such offering, with priority for inclusion to be determined as follows: (i) first, the securities that such other holders of the Company’s securities propose to sell, (ii) second, a number of Registrable Securities requested to be included by Newtek, and (iii) third, the securities the Company proposes to sell.

 

(d) Selection of Underwriters. If any Piggyback Registration that is a Primary Registration is an underwritten offering, the Company shall select the investment banker(s) and manager(s) for such offering. If any Piggyback Registration is an underwritten secondary offering on behalf of other holder(s) entitled to registration rights (other than Newtek), such holder(s) on whose behalf the registration statement is being filed shall select the investment banker(s) and manager(s) for such offering.

 

(e) Withdrawal. Newtek shall have the right to withdraw all or any portion of its Registrable Securities in a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the underwriter or underwriters (if any) of its intention to withdraw such Registrable Securities from such Piggyback Registration up to (i) in the case of a Piggyback Registration not involving an offering using a registration statement on Form S-3 or another similar short-form registration statement, three (3) days prior to the effective date of the applicable registration statement or (ii) in the case of any Piggyback Registration involving an offering using a Form S-3 or another similar short-form registration statement, three (3) days prior to the expected pricing date of such offering. The Company (whether on its own good-faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may decide not to file or withdraw a previously filed Registration Statement in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement.

 

Section 4. Underwriter’s Lockup. Newtek agrees that, in connection with any underwritten offering of Common Stock in which it is participating, it shall enter into a customary lock-up agreement with the managing underwriter or underwriters of such offering of Common Stock for the ninety (90) day period (or any lesser period (i) applicable to the Company’s directors and officers in connection with such underwritten offering of Common Stock or (ii) as may be permitted by the managing underwriter or underwriters in such underwritten offering of Common Stock) after the pricing date of such underwritten offering of Common Stock, subject to any exceptions permitted by such managing underwriter or underwriters. Newtek agrees to execute and deliver such other agreements as may be reasonably requested by the managing underwriter or underwriters which are consistent with the foregoing or which are necessary to give further effect thereto.

 

Section 5. Registration Procedures. Whenever any Registrable Securities are to be registered pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration, offering and the sale of such Registrable Securities hereunder in accordance with the intended method of disposition thereof as promptly as is practicable, and pursuant thereto the Company shall as reasonably practicable:

 

(a) notify Newtek of (i) the issuance by the Commission of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (ii) the receipt by the Company or its counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (iii) the effectiveness of each registration statement filed hereunder;

 

 

(b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus or prospectus supplement used in connection therewith during the Effectiveness Obligation Period and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement;

 

(c) furnish to Newtek such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus and any prospectus supplement), each Free-Writing Prospectus and such other documents as Newtek may reasonably request in order to facilitate the disposition of the Registrable Securities;

 

(d) use its reasonable best efforts to register or qualify, and cooperate with such Newtek, the underwriters, if any, and their respective counsel, such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller or underwriter, if any, or their respective counsel reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 5(d), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction);

 

(e) except to the extent prohibited by applicable law and subject to entry into a customary confidentiality agreement or arrangement, make available after reasonable advance notice during business hours at the offices where such information is normally kept for inspection by Newtek and any underwriter participating in any distribution pursuant to such registration, and any attorney, accountant or other agent retained by Newtek or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as such parties may reasonably request in connection with customary due diligence and drafting sessions, and cause the Company’s officers, directors and employees to supply all information reasonably requested by Newtek, underwriter, attorney, accountant or agent in connection with the same; provided, however, that information obtained hereunder shall be used by such persons only for purposes of conducting such due diligence or drafting sessions;

 

(f) promptly notify Newtek in writing at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading in light of the circumstances then existing, and, at the request of Newtek, the Company promptly shall prepare, file with the Commission and furnish to Newtek a reasonable number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; provided that Newtek, upon receipt of any notice from the Company of any event of the kind described in this Section 5(f), shall forthwith discontinue disposition of the Registrable Securities pursuant to the registration statement covering such Registrable Securities until Newtek is advised in writing by the Company that the use of the prospectus may be resumed and is furnished with a supplemented or amended prospectus as contemplated by this Section 5(f), and if so directed by the Company, Newtek shall deliver to the Company all copies, other than permanent file copies then in Newtek’s possession, of the prospectus covering such Registrable Securities at the time of receipt of such notice; provided, further, that such obligation shall only apply during the Effectiveness Obligation Period;

 

 

(g) use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or quoted;

 

(h) provide and cause to be maintained a transfer agent, registrar and CUSIP number for all such Registrable Securities from and after a date not later than the effective date of such registration statement;

 

(i) take all reasonable actions to ensure that any Free-Writing Prospectus prepared by or on behalf of the Company in connection with any offering of Registrable Securities complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that such obligation shall only apply during the Effectiveness Obligation Period;

 

(j) use its reasonable best efforts to prevent the issuance of any stop order suspending the effectiveness of any Registration Statement or of any order preventing or suspending the use of any preliminary or final prospectus and in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or the issuance of any order suspending or preventing the use of any related prospectus or suspending the qualification of any equity securities included in such registration statement for offering or sale in any jurisdiction, the Company shall use its reasonable best efforts to promptly obtain the withdrawal or lifting of such order, including through the filing of a registration statement or amending or supplementing the prospectus, if necessary;

 

(k) if requested by the managing underwriter(s) in a underwritten offering, obtain (i) a comfort letter from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by such comfort letters and (ii) opinions of counsel from the Company’s counsel in customary form and covering such matters of the type customarily covered in a public issuance of securities, in each case in form and substance reasonably satisfactory to the underwriter(s) in such offering and addressed to the managing underwriter(s);

 

(l) otherwise use its reasonable best efforts to take all other steps necessary to effect the registration, marketing and sale of such Registrable Securities contemplated hereby; and

 

(m) notwithstanding any other provision of this Agreement, the Company may postpone the filing or the effectiveness of a registration statement or any amendment thereto or the filing of a prospectus or a prospectus supplement pursuant to this Agreement for a period of up to thirty (30) days if (i) the Board of Directors of the Company (the “Board”) determines that a postponement is in the best interest of the Company and its stockholders generally due to a pending transaction involving the Company (including a pending securities offering by the Company), (ii) the Board determines such filing would render the Company unable to comply with applicable securities laws or (iii) the Board determines such filing would require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential (any such period, a “Blackout Period”); provided, however, that in no event shall any Blackout Period exceed an aggregate of one hundred and twenty (120) days in any twelve (12) month period.

 

 

Section 6. Certain Obligations of Holders of Registrable Securities. Newtek agrees as follows:

 

(a) Newtek shall cooperate with the Company (as reasonably requested by the Company) in connection with the preparation of the applicable registration statement and prospectus included therein and any supplement or amendment thereto, and, for so long as the Company is obligated to file and keep effective such registration statement, Newtek shall provide to the Company, in writing, for use in the applicable registration statement and prospectus included therein and any supplement or amendment thereto, all such information regarding Newtek and its plan of distribution of such securities as may be reasonably necessary to enable the Company to prepare the registration statement and prospectus included therein and any supplement or amendment thereto covering such securities, to maintain the currency and effectiveness thereof and otherwise to comply with all applicable requirements of law in connection therewith. If Newtek fails to timely cooperate with the Company in accordance with this Section 6(a), the Company will not be required to include the Registrable Securities in the applicable registration.

 

(b) During such time as Newtek may be engaged in a distribution of such securities, Newtek shall distribute such securities under the registration statement solely in the manner described in the registration statement.

 

(c) Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(f), Newtek shall immediately discontinue the disposition of its securities of the Company pursuant to the registration statement until Newtek’s receipt of the copies of a supplemented or amended prospectus as contemplated by Section 5(f). In the event the Company has given any such notice, the applicable time period set forth in Section 5(b) during which a registration statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to this Section 6(c) to and including the date when Newtek shall have received the copies of the supplemented or amended prospectus contemplated by Section 5(f).

 

Section 7. Registration Expenses. All expenses incurred by the Company in connection with complying with its obligations pursuant to this Agreement, including all registration, qualification and filing fees, fees and expenses of compliance with securities or blue sky laws, filing expenses, printing expenses, messenger and delivery expenses, fees and disbursements of custodians and fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”), shall be borne by the Company, provided, however, that all Registration Expenses with respect to Underwritten Takedowns beyond the initial two (2) Underwritten Takedowns consummated in accordance with this Agreement shall be borne by Newtek. Notwithstanding the foregoing, Newtek shall bear and pay all underwriting discounts, selling commissions, stock transfer taxes and fees and expenses of its legal counsel and any of its other expenses incurred in connection with the matters set forth in this Agreement that are not Registration Expenses.

 

Section 8. Participation in Underwritten Registrations. Newtek may not participate in any registration hereunder which is underwritten unless Newtek (a) agrees to sell its Registrable Securities on the basis provided in any underwriting arrangements in form customary for transactions of this type (including pursuant to any over-allotment or “green shoe” option requested by the underwriters, provided that Newtek shall not be required to sell more than the number of Registrable Securities it has requested to include) and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements (including lock-up agreements) and other documents required under the terms of such underwriting arrangements to the extent the foregoing are customary in form and substance for underwritten offerings of such kind.

 

 

Section 9. Indemnification.

 

(a) The Company shall indemnify and hold harmless, to the fullest extent permitted by law, Newtek, its officers, directors, members, managers, partners, agents, Affiliates and employees, each investment manager or investment adviser of Newtek and each Person who acts on behalf of or controls Newtek (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against all losses, claims, actions, damages, liabilities and expenses caused by, resulting from, arising out of or based upon any of the following statements, omissions or violations by the Company: (i) any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus, preliminary prospectus, offering circular, Free-Writing Prospectus or similar document (including any related registration statement, notification, or the like), or any amendment thereof or supplement thereto or any document incorporated by reference therein incident to any registration, qualification, compliance or sale effected pursuant to this Agreement, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any other similar federal, state or common law or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, except to the extent that the same are caused by or based upon or related to any untrue statement (or alleged untrue statement) or omission (or alleged omission) made in reliance upon and in conformity with any Investor Information (as defined below).

 

(b) In connection with any registration in which Newtek is participating, Newtek shall furnish to the Company in writing such information and affidavits as the Company reasonably requests (such information, the “Investor Information”) for use in connection with any such registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus, offering circular, Free-Writing Prospectus or similar document (including any related registration statement, notification, or the like), or any amendment thereof or supplement thereto or any document incorporated by reference therein incident to any registration, qualification, compliance or sale effected pursuant to this Agreement and, to the fullest extent permitted by law, shall indemnify and hold harmless the Company, its directors, officers, agents and each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus, offering circular, Free-Writing Prospectus or similar document (including any related registration statement, notification, or the like), or any amendment thereof or supplement thereto or any document incorporated by reference therein incident to any registration, qualification, compliance or sale effected pursuant to this Agreement and any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by Newtek expressly for use therein and in reliance upon and in conformity with the Investor Information expressly for use therein and has not been corrected in a subsequent writing prior to or concurrently with the sale of Registrable Securities to the Person asserting the claim.

 

 

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not actually and materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party by giving written notice of the same. The indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without the consent of the indemnifying party (which consent shall not be unreasonably withheld or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one (1) counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicting indemnified parties shall have a right to retain one (1) separate counsel, chosen by Newtek by such conflicting indemnified parties, at the expense of the indemnifying party. No indemnifying party, in the defense of such claim or litigation, shall, except with the consent of each indemnified party, consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof (A) the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation in form and substance reasonably satisfactory to such indemnified party, and (B) a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such indemnified party, and provided that any sums payable in connection with such settlement are paid by the indemnifying party. The indemnifying party shall not be liable hereunder for any amount paid or payable or incurred pursuant to or in connection with any judgment entered or settlement effected with the consent of an indemnified party unless the indemnifying party has also consented to such judgment or settlement (such consent not to be unreasonably withheld, conditioned or delayed).

 

(d) If for any reason the indemnification provisions contemplated by Section 9(a) or Section 9(b) are held a court of competent jurisdiction to be unavailable to or insufficient to hold harmless an indemnified party in respect of or is otherwise unenforceable with respect to any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to therein, then the indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact has been made by or relates to information supplied by the indemnifying party or the indemnified party, whether the violation of the Securities Act or any other federal or state securities law or rule or regulation promulgated thereunder applicable to the Company and relating to any action or inaction required of the Company in connection with any registration of securities was perpetrated by the indemnifying party or the indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 9(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or, except as provided in Section 9(c), defending any such action or claim. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Newtek’s obligations in this Section 9(d) to contribute shall be limited to an amount equal to the net proceeds actually received by Newtek from the sale of Registrable Securities effected pursuant to such registration.

 

(e) The indemnification and contribution provided for under this Agreement shall be in addition to any other rights to indemnification and contribution that any indemnified party may have pursuant to law or contract and shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party.

 

 

(f) The indemnities provided in this Section 9 shall survive the Transfer of any Registrable Securities by Newtek.

 

(g) The provisions of this Section 9 shall remain in full force and effect regardless of any investigation made by or on behalf of any indemnified party or any officer, director or controlling person of such indemnified party.

 

Section 10. Facilitation of Sale Pursuant to Rule 144. The Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act), and shall take such further action as Newtek may reasonably request, all to the extent required from time to time to enable Newtek to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of Newtek in connection with its sale pursuant to Rule 144, the Company shall deliver to Newtek a written statement as to whether it has complied with such requirements.

 

Section 11. Term. This Agreement shall become effective upon the Closing and shall terminate upon the earlier to occur of (a) the date as of which all of the Registrable Securities have been sold pursuant to a registration statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)), (b) the date as of which all Registrable Securities have been sold under Rule 144 under the Securities Act and (c) the date as of which all Registrable Securities cease to be Registrable Securities. The provisions of Section 9 and Section 10 shall survive any termination.

 

Section 12. Lockup Provisions.

 

(a) Newtek hereby agrees during the Lockup Period that it will not Transfer any Company Preferred Stock or publicly announce its intention to Transfer any Company Preferred Stock, provided that (i) for the avoidance of doubt, Newtek may Transfer any Company Preferred Stock to one of its subsidiaries, (ii) this Section 12 shall not prohibit a Transfer in connection with a sale of the Company and (iii) this Section 12 shall be subject in all cases to Section 7.21 of the Merger Agreement.

 

(b) If any Transfer is made or attempted contrary to the provisions of this Agreement, such purported Transfer shall be null and void ab initio, and the Company shall refuse to recognize any such purported transferee of the Company Preferred Stock as one of its equity holders for any purpose. In order to enforce this Section 12(b), the Company may impose stop-transfer instructions with respect to the Company Preferred Stock until the end of the Lockup Period.

 

(c) During the Lockup Period, the Company Preferred Stock shall contain a legend in substantially the following form, in addition to any other applicable legends:

 

“THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, DATED AS OF AUGUST 11, 2024, BY AND BETWEEN THE ISSUER OF SUCH SECURITIES (THE “ISSUER”) AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

 

Section 13. Definitions.

 

“Affiliate” means, as applied to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person. The term “Affiliated” shall have the correlative meaning. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

 

“Common Stock” means the common stock, par value $0.001 per share, of Intelligent Protection Management Corp., a Delaware corporation.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated from time-to-time thereunder.

 

“Free-Writing Prospectus” means a free-writing prospectus, as defined in Rule 405 promulgated under the Securities Act.

 

“Lockup Period” means the period of time beginning on the date hereof and ending on the date that is one (1) year following the Closing.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

“Registrable Securities” means shares of Common Stock that are issuable upon conversion of the Subject Preferred Stock received by Newtek as part of the Closing Stock Consideration and the Earn-Out Stock Consideration Amount, if any. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (A) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been Transferred in accordance with such registration statement; (B) such securities shall have been otherwise Transferred; or (C) such securities cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).

 

“Rule 144,” “Rule 174,” “Rule 405” and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the Commission, as the same shall be amended from time to time, or any successor rule then in force.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated from time-to-time thereunder.

 

“Transfer” shall mean to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any interest owned by a person or any interest (including a beneficial interest) in, or the ownership, control or possession of, any interest owned by a Person.

 

 

Section 14. Miscellaneous.

 

(a) Remedies. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The Parties acknowledge and agree that any Party would be irreparably harmed by, and money damages would not be an adequate remedy for, any breach of the provisions of this Agreement and that, in addition to any other rights and remedies existing in its favor, any Party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.

 

(b) Amendments and Waivers. The provisions of this Agreement may be amended, and any provision of this Agreement may be waived, only upon the prior written consent of the Parties. No course of dealing between or among the Parties (including the failure of any Party to enforce any of the provisions of this Agreement) shall be deemed effective to modify, amend, waive or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement, and the failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms. The waiver by any Party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach.

 

(c) Successors and Assigns; Joinder. Newtek may transfer or assign its rights under this Agreement in connection with a Transfer of twenty percent (20%) or more of the Subject Preferred Stock held by Newtek and its Affiliates as of the date hereof without the prior written consent of the Company; provided that reasonably promptly following any such Transfer, (i) Newtek provides a written notice to the Company stating the name and address of such transferee and identifying the amount of Registrable Securities with respect to which the rights under this Agreement were transferred and (ii) such transferee agrees in writing with the Company to be bound by this Agreement as fully as if it were an initial signatory hereto pursuant to a written instrument in form and substance reasonably acceptable to the Company, and any such transferee may thereafter make corresponding assignments so long as such assignments comply with the requirements set forth in this Section 14(c). In addition and for the avoidance of doubt, any subsidiary to which Newtek Transfers any Company Preferred Stock shall become party to this Agreement upon its agreement in writing with the Company to be bound by this Agreement as fully as if it were an initial signatory hereto pursuant to a written instrument in form and substance reasonably acceptable to the Company. Neither this Agreement nor any of the covenants and agreements herein or rights, interests or obligations hereunder may be assigned or delegated by the Company, except in connection with a purchase of all or substantially all of the Company’s assets, or to any successor by way of merger, consolidation or similar transaction.

 

(d) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only in such jurisdiction and to the extent of such prohibition or illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement in such jurisdiction or any provisions of this Agreement in any other jurisdiction.

 

(e) Counterparts. This Agreement and any amendments hereto, to the extent signed and delivered in counterparts (any one of which need not contain the signatures of more than one Party hereto or thereto, but all such counterparts together shall constitute one and the same Agreement) by means of a facsimile machine or electronic transmission in portable document format (pdf), shall be treated in all manner and respects as an original thereof and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party hereto, each other Party hereto shall re-execute original forms hereof and deliver them to all other Parties hereto. No Party hereto shall raise the use of a facsimile machine or electronic transmission in pdf to deliver a signature or the fact that any signature or document was transmitted or communicated through the use of facsimile machine or electronic transmission as a defense to the formation of a contract, and each such Party forever waives any such defense.

 

 

(f) Descriptive Headings; Interpretation. The headings and captions used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The use of the word “including” herein shall mean “including without limitation.” Any reference to the masculine, feminine or neuter gender shall be deemed to include any gender or all three as appropriate.

 

(g) Governing Law; Jurisdiction; Agreement for Service. This Agreement, and all claims or causes of action based upon, arising out of or related to this Agreement or the transactions contemplated herein, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware. Each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware, for the purposes of any proceeding, claim, demand, action or cause of action (a) arising under this Agreement or the transactions contemplated hereby or (b) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement, and irrevocably and unconditionally waives any objection to the laying of venue of any such proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such proceeding has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any proceeding claim, demand, action or cause of action against such Party (i) arising under this Agreement or the transactions contemplated hereby or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement, (A) any claim that such Party is not personally subject to the jurisdiction of the courts as described in this Section 14(g) for any reason, (B) that such Party or such Party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the proceeding, claim, demand, action or cause of action in any such court is brought against such Party in an inconvenient forum, (y) the venue of such proceeding, claim, demand, action or cause of action against such Party is improper or (z) this Agreement, the transactions contemplated hereby, or the subject matter hereof, may not be enforced against such Party in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such Party’s respective address set forth in Section 14(i) shall be effective service of process for any such proceeding, claim, demand, action or cause of action.

 

(h) WAIVER OF TRIAL BY JURY. THE PARTIES EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14(H).

 

 

(i) Notice. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given) by delivery in person, by e-mail (having obtained electronic delivery confirmation thereof (i.e., an electronic record of the sender that the e-mail was sent to the intended recipient thereof without an “error” or similar message that such e-mail was not received by such intended recipient)), or by registered or certified mail (postage prepaid, return receipt requested) (upon receipt thereof) to the other Parties as follows:

 

If to the Company:

 

Intelligent Protection Management Corp.

30 Jericho Executive Plaza, Suite 400E

Jericho, NY 11735

Attn: Chief Executive Officer

E-mail: jkatz@paltalk.com

 

with a copy (which shall not constitute notice) to:

 

Haynes and Boone, LLP

2801 N. Harwood Street, Suite 2300

Dallas, TX 75201

Attn: Gregory R. Samuel

E-mail: greg.samuel@haynesboone.com

 

If to Newtek:

 

NewtekOne, Inc.

1981 Marcus Avenue, Suite 130

Lake Success, NY 11042

Attention: Chief Executive Officer and Chief Legal Officer

Email: bsloane@newtekone.com; mschwartz@newtekone.com

 

with a copy (which shall not constitute notice) to:

 

Sullivan & Cromwell LLP

125 Broad St.

New York, New York 10004

Attention: Jared M. Fishman

Email: fishmanj@sullcrom.com

 

 

(j) Rights Cumulative. The rights and remedies of each of the Parties under this Agreement shall be cumulative and not exclusive of any rights or remedies which a Party would otherwise have hereunder at law or in equity or by statute, and no failure or delay by either Party in exercising any right or remedy shall not impair any such right or remedy or operate as a waiver of such right or remedy, and neither shall any single or partial exercise of any power or right preclude a Party’s other or further exercise thereof or the exercise of any other power or right.

 

(k) No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

(l) Other Registration Rights. Other than the Registration Rights Agreement with Clifford Lerner, dated October 7, 2016, the Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any other Person with respect to any securities of the Company. From and after the date of this Agreement, the Company shall not, without the prior written consent of Newtek, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are senior to or conflict with the registration rights granted to Newtek hereunder, including, for clarity, allowing any other holder of Common Stock to have registration rights in the nature or substantially in the nature of those set forth in this Agreement that would have priority over the Registrable Securities with respect to the inclusion of such securities in any registration statement.

 

(m) Entire Agreement. This Agreement and the other agreements and instruments referred to herein contain the complete agreement between the Parties with respect to the subject matter hereof and thereof and supersede any prior understandings, agreements and representations by or between the Parties hereto (whether written or oral) that may have related to the subject matter hereof or thereof in any way.

 

* * * * *

 

 

IN WITNESS WHEREOF, the Parties have executed or caused to be executed on their behalf this Registration Rights Agreement as of the date first written above.

 

	COMPANY:
	INTELLIGENT PROTECTION MANAGEMENT CORP.
	By:	/s/ Jason Katz
	Name:	Jason Katz
	Title:	Chief Executive Officer
	NEWTEK:
	NEWTEKONE, INC.
	By:	/s/ Barry Sloane
	Name:	Barry Sloane
	Title:	Chief Executive Officer

 

Signature Page to Registration Rights Agreement

 

 

 

Exhibit 10.2 

 

SECOND AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Second Amended and Restated Executive Employment Agreement (this “Agreement”) is entered into on January 2, 2025 (the “Execution Date”), by and between Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”), and Jason Katz (“Executive”).

 

RECITALS

 

WHEREAS, the Company and Executive (collectively the “Parties” and each individually a “Party”) previously entered into that certain Amended and Restated Employment Agreement, dated as of March 23, 2022 (the “Prior Agreement”), and this Agreement amends and restates the Prior Agreement in its entirety;

 

Whereas, prior to the Execution Date, Executive was employed as the Company’s Chief Executive Officer, President and Chief Operating Officer;

 

Whereas, the Company desires to continue to employ Executive as its Chief Executive Officer, and Executive desires to be employed by the Company in such role;

 

Whereas, the Parties desire to set forth in writing the terms and conditions of their agreement and understandings with respect to the employment of Executive; and

 

Whereas, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, for the period and upon the terms and conditions contained in this Agreement.

 

Now, Therefore, in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1. Incorporation of Recitals; Agreement to Employ. The above recitals are hereby incorporated into this Agreement as if fully set forth herein. The Parties desire to enter into this Agreement to, among other things, set forth the terms of Executive’s employment with the Company. The Parties acknowledge that this Agreement supersedes the Prior Agreement and any other offer, agreement or promises made by anyone concerning any offer of employment by the Company, and this Agreement comprises the complete agreement between the Parties concerning Executive’s employment by the Company.

 

2. Term of Agreement. This Agreement shall be binding upon and enforceable against the Parties immediately when both Parties execute this Agreement. This Agreement’s stated term and the employment relationship created hereunder will begin on the Execution Date and will remain in effect for one (1) year, unless earlier terminated in accordance with Section 9 (the “Initial Employment Term”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each a “Renewal Term”), unless terminated by either Party upon written notice to the other Party given at least ninety (90) days before the end of the Initial Employment Term or any Renewal Term, as applicable, or unless earlier terminated in accordance with Section 9. The period during which Executive is employed under this Agreement (including the Initial Employment Term and any Renewal Term(s)) will be referred to as the “Employment Period.”

 

3. Surviving Agreement Provisions. Notwithstanding any provision of this Agreement to the contrary, the Parties’ respective rights and obligations under Sections 6 through 12 shall survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

 

4. Services to be Provided by Executive.

 

(a) Position and Responsibilities. Executive’s services hereunder will commence as of the Execution Date. Subject to this Agreement’s terms, Executive agrees to serve the Company as its Chief Executive Officer. Executive shall have the duties and privileges customarily associated with executives occupying the roles of Chief Executive Officer, and Executive shall perform all reasonable acts customarily associated with such roles, or necessary and/or desirable to protect and advance the best interests of the Company. Executive will report to the Company’s Board of Directors (the “Board”). Executive agrees to devote substantially all his business time to the business of the Company (except as provided below).

 

 

(b) Executive’s Employment Representations. Executive agrees that he (i) shall not serve as a member of any board of directors, or as a trustee of, or in any manner be affiliated with, any present or future agency or organization (except for civic, religious, and not for profit organizations) without the prior written consent of the Board (which consent will not be unreasonably withheld); (ii) will serve as an executive of the Company; and (iii) shall not, directly or indirectly, have any interest in, or perform any services for, any business competing with or similar in nature to the Company’s business as set forth in Section 7. Executive further represents to the Company that (A) he is not violating and will not violate any contractual, legal, or fiduciary obligations or burdens to which Executive is subject by entering into this Agreement or providing services under this Agreement’s terms; (B) Executive is under no contractual, legal, or fiduciary obligation or burden that he will allow to interfere with Executive’s ability to perform services under this Agreement’s terms; and (C) he has no bankruptcies, convictions, disputes with regulatory agencies, or other disclosable or disqualifying events that would impact the Company or its ability to conduct securities offerings. Notwithstanding anything to the contrary herein, nothing shall prevent or restrict Executive’s ownership of, serving as a board member or a trustee for, or providing services (in any capacity) to, any entity (or derivative thereof) for which he currently has an equity interest and provides such services, provided that such activities: (1) do not reasonably interfere with his provision of services to the Company and (2) such entities are not competing businesses with the Company as set forth in Section 7.

 

5. Compensation for Services. As compensation for the services Executive will perform under this Agreement, the Company will pay Executive during the Employment Period, and Executive shall accept as full compensation, the following:

 

(a) Base Salary. Executive shall receive an annualized base salary (“Base Salary”) of Two Hundred Twenty-Five Thousand Dollars (US $225,000), commencing as of the Execution Date (and retroactive to January 1, 2025), prorated for any partial years of employment with the Company. Additionally, the Board will review Executive’s Base Salary at least annually during the Employment Period, and, in the sole discretion of the Board, may increase (but not decrease) such Base Salary from time to time, but shall not be obligated to effectuate such an increase. Executive’s compensation shall be subject to all appropriate federal and state withholding taxes and shall be payable in accordance with the Company’s normal payroll procedures.

 

(b) Bonus Compensation. Annual incentive bonuses awarded to Executive for any calendar year during the Employment Period shall be determined by the Board, based on criteria to be established jointly by the Board and Executive and communicated to Executive in writing. Each such annual incentive bonus, if any, shall be payable during the annual review period (generally January or February) in the calendar year following the calendar year to which the annual incentive bonus relates, provided Executive is employed by the Company on such payment date. 

 

(c) Vacation. During the Employment Period, Executive shall be entitled to five (5) weeks paid vacation annually. Vacation shall be taken at such times and intervals as shall be determined by Executive, subject to the reasonable business needs of the Company. Upon the termination of Executive’s employment, for any reason, Executive will forfeit any accrued but unused vacation, resulting in no accrued, unused vacation being paid to Executive.

 

(d) Other Benefits and Perquisites. Executive shall be entitled to participate in the benefit plans provided by the Company for all employees generally and for the Company’s executive employees. The Company shall be entitled to change or terminate these plans in its sole discretion at any time. Any reimbursement of expenses made under this Agreement shall only be made for eligible expenses incurred during the Employment Period, and no reimbursement of any expense shall be made by the Company after December 31st of the year following the calendar year in which the expense was incurred. The amount eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and the right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit. Executive will comply with the Company’s policies regarding these benefits, including all Internal Revenue Service rules and requirements.

 

(e) Withholdings and Deductions. The compensation described in this Section 5 is subject to all legally required and authorized withholdings and deductions.

 

 

6. Confidential Information.

 

(a) Confidential Information. Executive acknowledges and agrees that during Executive’s engagement with the Company, whether as an owner, employee, or otherwise, the Company has provided and shall continue to provide Executive with confidential information and trade secrets of the Company (hereinafter referred to as “Confidential Information”) and shall place Executive in a position to develop and have ongoing access to Confidential Information of the Company, shall entrust Executive with business opportunities of the Company, and shall place, and has placed, Executive in a position to develop business goodwill on behalf of the Company. For purposes of this Agreement, all references to “the Company” include any predecessor thereto and Confidential Information includes, but is not limited to:

 

i.

Technologies developed by the Company and any research data or other documentation related to the development of such technologies, including all designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, developed or acquired by Executive, individually or in conjunction with others during the period of Executive’s engagement with the Company, whether as an owner, employee, or otherwise;

 

ii.

All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, logs, drawings, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression that are conceived, developed or acquired by Executive individually or in conjunction with others while Executive is employed or otherwise engaged by, or owns an ownership interest in, the Company (whether during business hours or otherwise and whether on any Company premises or otherwise) that relate to the Company’s business, trade secrets, products or services;

 

iii.

Customer lists and prospect lists developed by the Company or Executive;

 

iv.

Information regarding the Company’s customers which Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information, and other information regarding the customer’s business;

 

v.

Information related to the Company’s business, including but not limited to, marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

 

vi.

Training materials developed by and utilized by the Company; and

 

vii.

Any other information that Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, and which Executive has a reasonable basis to believe the Company would not want disclosed to a business competitor or to the general public, regardless of whether Executive received or had possession of the information before or after the Execution Date and including, without limitation, trade secrets.

 

Executive understands and acknowledges that such Confidential Information gives the Company a competitive advantage over others who do not have the information, and that the Company would be harmed if the Confidential Information were disclosed.

 

 

The Company hereby notifies Executive in accordance with the Defend Trade Secrets Act of 2016 that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Executive that if Executive files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Agreement shall prohibit either Party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the Party.

 

(b) Disclosure of Confidential Information. Executive agrees that he shall hold all Confidential Information in trust for the Company and shall not during or after his employment terminates for any reason: (i) use the information for any purpose other than the benefit of the Company; or (ii) disclose to any person or entity any Confidential Information of the Company except as necessary during Executive’s employment with the Company to perform services on behalf of the Company. Executive shall also take reasonable steps to safeguard such Confidential Information and to prevent its disclosure to unauthorized persons.

 

(c) Return of Information. Upon termination of employment, or at any earlier time as directed by the Company, Executive shall immediately deliver to the Company any and all Confidential Information in Executive’s possession, any other documents or information that Executive acquired as a result of his employment with the Company and any copies of any such documents/information. Executive shall not retain any originals or copies of any documents or materials related to the Company’s business, which Executive came into possession of or created as a result of his employment with the Company. Executive acknowledges that such information, documents and materials are the exclusive property of the Company. In addition, upon termination of employment, or at any time earlier as directed by the Company, Executive shall immediately deliver to the Company any property of the Company in Executive’s possession.

 

7. Restrictive Covenants. In consideration for the Company’s promise to provide Confidential Information to Executive, the substantial economic investment made by the Company in the Confidential Information, trade secrets and goodwill of the Company (including, without limitation, customer relationships), and the business opportunities disclosed or entrusted to Executive, the compensation and other benefits provided by the Company to Executive, and the Company’s employment of Executive pursuant to this Agreement, and to protect the Confidential Information, trade secrets and Company goodwill (including, without limitation, customer relationships), Executive agrees to enter into the following restrictive covenants.

 

(a) Non-Competition. Executive agrees that, during the Employment Period and during the Non-Competition Period (defined below), other than in connection with his duties under this Agreement, he shall not, without the prior written consent of the Board, directly or indirectly, either individually or as a principal, partner, stockholder, manager, agent, consultant, contractor, employee, lender, investor, or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, become employed by, control, carry on, join, lend money for, operate, engage in, establish, perform services for, invest in, solicit investors for, or consult for any person or entity engaged, or preparing to engage, in the Business (defined below) or any portion thereof within the Restricted Area (defined below). Notwithstanding the foregoing, Executive shall be permitted during the Employment Period to own, directly or indirectly, solely as an investment, securities of any organization or entity that are traded on any national securities exchange or the over-the-counter market if Executive is not the controlling shareholder or a member of a group that controls such organization or entity, and directly or indirectly, does not own three percent (3%) or more of any class of securities of such organization or entity.

 

 

For purposes of this Agreement, the following definitions shall apply:

 

i.

“Affiliate” has the meaning set forth in Section 11(a).

 

ii.

“Business” means the business in which the Company is actually engaged or has taken material steps to engage in as of the date Executive’s employment with the Company terminates for any reason.

 

iii.

“Company” means Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.) and any current or future Affiliates.

 

iv.

“Non-Competition Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

v.

“Non-Solicitation Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

vi.

“Person” has the meaning set forth in Section 11(a).

 

vii.

“Restricted Area” means, because the Company’s business is nationwide, Executive’s responsibilities are nationwide in scope, and Executive has access to the Confidential Information on a nationwide basis, all States comprising the United States, and any other geographic area in which the Company conducts business and for which Executive has responsibilities during Executive’s employment.

 

(b) Non-Solicitation. Executive agrees that, during the Employment Period and during the Non-Solicitation Period, other than in connection with his duties under this Agreement and for the benefit of the Company during the Employment Period, Executive shall not, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether personally or through other persons, (i) solicit business from, interfere with, attempt to solicit business with, or do business with any customer of the Company with whom the Company did business or who the Company solicited within the preceding two (2) years, and who or which: (A) Executive contacted, called on, serviced or did business with during Executive’s employment with the Company; (B) Executive learned of solely as a result of Executive’s employment with the Company; or (C) about whom Executive received Confidential Information; (ii) interfere with any relationship between the Company or any of its Affiliates and any supplier, provided that Executive has knowledge that such supplier is a supplier of the Company or any of its Affiliates; or (iii) solicit, induce or attempt to solicit or induce, engage or hire, on behalf of himself or any other person or entity, any person who is an employee or consultant of the Company or who was employed by the Company within the preceding twelve (12) months. The Parties acknowledge and agree that, for purposes of this Agreement, the term “customer” in this Section 7(b) does not include actual or potential consumers or users of the Company’s applications. The restriction in this Section 7(b) applies only to solicitation for, interference on behalf of, attempts to solicit business for, or doing business with a business that is competitive with any portion of the Business (as defined above) of the Company or any Affiliate thereof.

 

(c) Non-Disparagement. Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company and its Affiliates which were obtained through great costs, time and effort. Therefore, Executive agrees that during his employment and at all times after the termination of his employment for any reason, Executive shall not in any way, directly or indirectly, publicly disparage, libel or defame the Company, its beneficial owners or its Affiliates, or any of either the Company’s or any of its Affiliates’ respective businesses or business practices, products services, employees, or contractors.

 

(d) Tolling. If Executive violates any of the restrictions contained in Section 7(a) or Section 7(b), the Non-Competition Period and/or the Non-Solicitation Period, as applicable, shall be suspended and will not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation to the reasonable satisfaction of the Company.

 

 

(e) Remedies. Executive acknowledges that the restrictions contained in Sections 6 and 7 of this Agreement, in view of the nature of the Company’s business, trade secrets, the Confidential Information and business goodwill (including, without limitation, customer relationships) and his position with the Company, are reasonable and necessary to protect the Company’s legitimate business interests and that any violation of Sections 6 or 7 of this Agreement would result in irreparable injury to the Company. In the event of a breach by Executive of Sections 6 or 7 of this Agreement, then the Company shall be entitled to (i) a temporary restraining order and injunctive relief restraining Executive from the commission of any breach, and/or (ii) recover attorneys’ and witness fees, expenses and costs the Company incurs in such action. Further, if the Company prevails in any action brought by Executive (or anyone acting on his behalf) seeking to declare any term in Sections 6 or 7 void or unenforceable or subject to reduction or modification, then the Company shall be entitled to recover attorneys’ and witness fees, expenses and costs the Company incurs in such action.

 

(f) Reformation. The courts shall be entitled to modify the duration and scope of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as modified shall be enforceable. Executive acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the Company’s investment in its businesses, trade secrets, Confidential Information and the goodwill (including, without limitation, customer relationships) thereof. Executive acknowledges that the scope and duration of the restrictions contained herein are necessary and reasonable in light of the time that Executive has been engaged in the business of the Company, Executive’s reputation in the markets for the Company’s business and Executive’s relationship with the suppliers, customers and clients of the Company.

 

8. Trading Restrictions. Executive will be subject to trading and sales volume limitations in accordance with (a) applicable law, including Rule 144 under the Securities Act of 1933, as amended; and (b) such written insider trading policies as the Board may adopt and promulgate for Company employees generally.

 

9. Termination of Agreement. The employment relationship between Executive and the Company created under this Agreement and the Employment Period shall terminate upon the occurrence of any one of the following events:

 

(a) Death or Permanent Disability. Executive’s employment hereunder shall be terminated effective on the death or permanent disability of Executive. For this purpose, “permanent disability” shall mean that Executive, (i) in the opinion of a physician, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company, (iii) is determined to be totally disabled by the Social Security Administration, or (iv) is determined to be disabled in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the requirements of (i) or (ii) above.

 

(b) Termination for Cause. The Company shall have the option to terminate Executive’s employment, effective upon written notice of such termination to Executive, for Cause as the Company determines. Under this Agreement, termination for “Cause“ means the Company’s termination of Executive’s employment upon the occurrence of any of the following events:

 

i.

Any act of fraud, misappropriation or embezzlement by Executive regarding any aspect of the Company’s or any of its Affiliates’ businesses;

 

ii.

The material breach by Executive of any Agreement provision and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

 

iii.

The conviction of Executive by a court of competent jurisdiction of a felony or a crime involving moral turpitude;

 

iv.

The intentional and material breach by Executive of any non-disclosure or non-competition/non-solicitation/non-interference provision of any agreement to which Executive and the Company or any of its current or future Affiliates are parties;

 

v.

The substantial failure by Executive to perform in all material respects his duties and responsibilities (other than as a result of death or permanent disability) and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

vi.

The failure or refusal of Executive to follow the lawful directives of the Board, which, if curable, Executive fails or refuses to cure within thirty (30) days after written demand is delivered;

 

vii.

Willful conduct by Executive that is materially injurious to the Company or any of its Affiliates;

 

viii.

Acceptance of employment with any employer other than the Company except upon written permission of the Board; or

 

ix.

The breach by Executive of any of his fiduciary duties to the Company.

 

Prior to any termination for Cause, the Company shall give Executive an opportunity to appear before the Board (with personal counsel, if Executive so chooses) in order to be heard on the matter. The Company shall provide Executive with a written notice of termination, which can be provided on the date of termination. In the event Executive’s employment is terminated for Cause under this Agreement, Executive shall be entitled to the compensation provided in Section 10(a) below.

 

(c) Termination by the Company without Cause. The Company may terminate Executive’s employment without Cause at any time upon thirty (30) days’ written notice to Executive, during which period Executive shall not be required to perform any services for the Company other than to assist the Company in training his successor and generally preparing for an orderly transition; provided, however, that Executive shall be entitled to compensation upon such termination as provided in Sections 10(a) and (b) below.

 

(d) Termination by Executive for Good Reason. Executive may terminate his employment at any time for Good Reason. For purposes of this Agreement, “Good Reason“ shall mean any of the following without Executive’s prior written consent: (i) Executive’s being required to regularly report to a regular place of employment outside New York, New York; (ii) the Company’s material breach of any of the terms and conditions of this Agreement; or (iii) a detrimental and material change in Executive’s title, compensation, duties, or responsibilities; provided, however, that within ninety (90) days following Executive’s learning of such Good Reason, (A) the Company shall be given written notice of Executive’s intent to terminate his employment under this paragraph, and (B) the Company shall have thirty (30) days from receipt of such written notice to cure any such breach, requirement to regularly report, or change to the reasonable satisfaction of Executive. Upon such termination for Good Reason, Executive shall be entitled to compensation as provided in Sections 10(a) and (b) below.

 

(e) Termination by Executive Other Than for Good Reason. Executive may terminate his employment other than for Good Reason at any time upon forty-five (45) days’ written notice to the Company. Upon termination of this Agreement, the Company shall have no obligation to Executive other than as set forth in Section 10(a).

 

 

(f) Separation from Service. For purposes of this Agreement, including, without limitation, Sections 10 and 11, any references to a termination of Executive’s employment shall mean a “separation from service” as defined by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations and other guidance issued thereunder.

 

10. Compensation Upon Termination. Upon the termination of Executive’s employment under this Agreement before the expiration of the end of the stated term in this Agreement, Executive shall be entitled to the following:

 

(a) Compensation Upon Termination for Any Reason. Upon termination of Executive’s employment during the Employment Period before the expiration of the end of the stated term hereof for any reason or upon expiration of the stated term, Executive shall be entitled to the following within thirty (30) days of such termination:

 

i.

Accrued Base Salary. The Base Salary earned by him before the effective date of termination as provided in Section 5(a) that is unpaid (including salary payable during any applicable notice period), prorated on the basis of the number of full days of service rendered by Executive during the salary payment period to the effective date of termination; and

 

ii.

Unreimbursed Business Expenses; Company Benefit Plans. Any unreimbursed reasonable business expenses and any amounts to which Executive is entitled to under the Company’s benefit plans in accordance with their terms.

 

(b) Additional Compensation and Benefits Upon Non-Renewal by the Company or Upon Termination by the Company Without Cause or by Executive for Good Reason. If, at any time, (i) the Company elects not to renew this Agreement for any Renewal Term and Executive’s employment terminates as a result of such non-renewal, (ii) the Company terminates Executive’s employment without Cause (as defined in Section 9(b) above), or (iii) Executive terminates his employment for Good Reason (as defined in Section 9(d) above), then the Company shall, subject to Executive’s execution of a general release of claims in favor of the Company and subject to Executive’s compliance with Section 6 and Section 7, provide to Executive, in addition to the amounts set forth in Section 10(a) above, an amount equal to one (1) times the Executive’s then-current annualized Base Salary, less the amount of all compensation paid to Executive during the then-current term of this Agreement; provided, however, that in no event shall such payment equal less than four (4) months of the Executive’s then-current annualized Base Salary. Such payment shall be payable in equal installments over the balance of the then-current term of this Agreement, payable in accordance with the Company’s regularly scheduled payroll and commencing on the Company’s first regular payroll date that is five (5) days after the release of claims provided by Executive has become effective and binding upon Executive, provided, that, if the maximum forty-five (45) day consideration period and revocation period described in Section 10(d) spans two (2) tax years, then the payments shall commence in the second tax year. Additionally, if Executive is eligible and timely elects to continue his health insurance coverage pursuant to the COBRA statute, and subject to Executive’s execution of the release of claims referred to above, the Company will continue to pay its portion of Executive’s monthly health insurance premiums for the earlier of (A) the remainder of the then-current Term of this Agreement, or (B) the date Executive’s coverage under such group health plans terminates for any reason; provided that the Company’s payment of such premiums shall be limited to the same proportion of the cost of coverage under the Company’s group health plans as the Company pays on behalf of its employees generally (the “COBRA Entitlement”).

 

Executive shall have no obligation to mitigate any severance obligation of the Company under this Agreement by seeking new employment. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Agreement by the amount of earnings or benefits received by Executive in future employment.

 

 

Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of his employment, Executive’s rights and benefits under each of these plans, if any, shall be determined in accordance with the terms, conditions, and limitations of the plans and any separate agreement executed by Executive which may then be in effect.

 

(c) Penalty for Breach of Covenants. For any period of time that Executive is in breach of, or threatens to breach, Section 7, the Company shall not be obligated to pay any payments referenced in Section 10(b) of this Agreement, the Company’s payment obligations referenced in Section 10(b) of this Agreement shall terminate and expire, and the Company shall have no further obligations to Executive from and after the date of such breach or threatened breach. Additionally, the Company may recover any payments previously paid under Section 10(b) of this Agreement for the period of time that Executive was in breach of Section 7, save and except for $100, which $100 the Parties agree is sufficient consideration for the Waiver and Release of Claims referred to in Section 10(d). In addition, the Company shall have all other rights and remedies available under this Agreement, any other agreement, at law, or in equity.

 

(d) Release. Payment of any of the amounts described in this Section 10 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion of it during any applicable revocation period.

 

11. Compensation Upon Change in Control.

 

(a) Change in Control. For purposes of this Agreement, a “Change in Control” of the Company occurs upon a change in the Company’s ownership or the ownership of a substantial portion of its assets, as follows:

 

i.

Change in Ownership. A change in ownership of the Company occurs on the date that any Person, other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding stock pursuant to an offering of such stock, or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the Company’s stock, acquires ownership of the Company’s stock that, together with stock held by such Person, constitutes more than 50% of the total fair market value or total voting power of the Company’s stock. However, if any Person is considered to own already more than 50% of the total fair market value or total voting power of the Company’s stock, the acquisition of additional stock by the same Person is not considered to be a Change of Control.

 

ii.

Change in Ownership of Substantial Portion of Assets. A change in the ownership of a substantial portion of the Company’s assets occurs on the date that a Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person) all or a substantial portion of the assets of the Company, by reason of any sale, lease, exchange or other transfer of the assets of the Company. For purposes hereof, a “substantial portion of the assets of the Company” shall mean any portion of the Company’s overall assets representing more than fifty percent (50%) of the fair market value of the Company’s overall assets. However, there is no Change in Control when there is such a transfer to an entity that is controlled by the stockholders of the Company immediately after the transfer, through a transfer to (A) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock; (B) an entity, at least 50% of the total value or voting power of the stock of which is owned, directly or indirectly, by the Company; (C) a Person that owns directly or indirectly, at least 50% of the total value or voting power of the Company’s outstanding stock; or (D) an entity, at least 50% of the total value or voting power of the stock of which is owned by a Person that owns, directly or indirectly, at least 50% of the total value or voting power of the Company’s outstanding stock.

 

“Person” shall have the meaning given in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (“the Code”). Person shall include more than one Person acting as a group as defined by the Treasury Regulations issued under Section 409A of the Code.

 

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

 

The provisions of this Section 11(a) shall be interpreted in accordance with the requirements of the Treasury Regulations under Section 409A of the Code, it being the intent of the Parties that this Section 11(a) shall be in compliance with the requirements of said Code Section and said Treasury Regulations.

 

 

(b) Benefits Upon Termination Following Change in Control During the Employment Period.

 

i.

Severance Benefits. If, during the sixty (60) day period immediately prior to a Change in Control or during the one-year period beginning on the date of a Change in Control (the “Change Period”), (A) Executive’s employment is terminated by the Company (or by the acquiring or successor business entity following a Change in Control) other than for Cause (as defined in Section 9(b) above), or (B) Executive terminates his employment with the Company (or with the acquiring or successor business entity following a Change in Control) for Good Reason (as defined in Section 9(d) above), then Executive shall receive, in lieu of the severance benefits described in Section 10(b) above and subject to Executive’s execution of a general release of claims as provided in Section 11(d) below, a severance benefit in an amount equal to three (3) months of Executive’s annualized Base Salary (specified in Section 5(a)) as in effect on the date of the Change in Control plus three (3) months of the COBRA Entitlement.

 

ii.

No Payments Upon Breach. The Company shall have no obligation to provide any payments under this Section 11 if Executive is in breach or violation of any of the covenants contained in Section 7, which are applicable to Executive at the time of the payments.

 

iii.

No Duplication of Payment. The payment of amounts under this Section 11 shall be in lieu of, and not in addition to, any payments under Section 10(b).

 

iv.

Time and Form of Payment. Except as otherwise provided by Section 12, the Company shall pay the severance amount referenced in Section 11(b)(i) in a lump sum on the date that is sixty (60) days after the date of Executive’s termination of employment.

 

v.

Treatment of Equity Awards. Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of his employment, Executive’s rights and benefits under each such plan shall be determined in accordance with the terms, conditions, and limitations of the plan and any separate agreement executed by Executive which may then be in effect.

 

(c) No Mitigation or Offset. Executive shall not be required to mitigate the amount of any payment provided for in this Section 11 by seeking other employment or otherwise. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Section 11 by the amount of earnings or benefits received by Executive in future employment.

 

(d) Release. Payment of any of the amounts described in this Section 11 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company and any subsequent employment period with any acquiring or successor business entity following a Change in Control, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion thereof during any applicable revocation period.

 

 

12. Other Provisions.

 

(a) Remedies; Legal Fees. Each of the Parties to this Agreement shall be entitled to enforce his or its rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in his or its favor. In any action resulting from a breach of this Agreement, the prevailing Party shall be entitled to recover his or its reasonable attorneys’ fees.

 

(b) Limitations on Assignment. In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute. Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the explicit written consent of the Company. Any attempted assignment by Executive in violation of this Section 12(b) shall be void. Except as provided in this Agreement, nothing in this Agreement entitles any person other than the Parties to this Agreement to any claim, cause of action, remedy, or right of any kind, including, without limitation, the right of continued employment; provided, however, that the Company may freely assign this Agreement, and/or any rights hereunder, to any Affiliate or to any other entity. Further, to the extent applicable, each Affiliate of the Company will be deemed a third-party beneficiary and may enforce the applicable rights and obligations under this Agreement. The Company’s assignees or successors are expressly authorized to enforce the Company’s rights and privileges hereunder, including without limitation the restrictive covenants set forth in Section 6 and Section 7.

 

(c) Severability and Reformation. The Parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 12(c).

 

(d) Notices. Any notice or other communication required, permitted or desired to be given under this Agreement shall be deemed delivered when personally delivered; the business day, if delivered by overnight courier; the same day, if transmitted by facsimile on a business day before noon, Eastern Standard Time; the next business day, if otherwise transmitted by facsimile; and the third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as addressed or transmitted as follows (or to such subsequent addresses as the Parties may give one another notice of):

 

If to Executive, at the last address for him on record with the Company. If to the Company:

 

Intelligent Protection Management Corp.

30 Jericho Executive Plaza

Suite 400E

Jericho, NY 11753

 

(e) Further Acts. Whether or not specifically required under the terms of this Agreement, each Party shall execute and deliver such documents and take such further actions as shall be necessary in order for such Party to perform all of his or its obligations specified in this Agreement or reasonably implied from this Agreement’s terms.

 

 

(f) Publicity and Advertising. Executive agrees that the Company may use his name, picture, or likeness for any advertising, publicity or other business purpose at any time, during the term of this Agreement and may continue to use materials generated during the term of this Agreement for a period of six (6) months thereafter. The use of Executive’s name, picture, or likeness shall not be deemed to result in any invasion of Executive’s privacy or in violation of any property right Executive may have; and Executive shall receive no additional consideration if his name, picture or likeness is so used. Executive further agrees that any negatives, prints or other material for printing or reproduction purposes prepared in connection with the use of his name, picture or likeness by the Company shall be and are the sole property of the Company.

 

(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.

 

(h) Venue. The exclusive venue for all suits or proceedings arising from or related to this Agreement shall be in a court of competent jurisdiction in Nassau County, New York.

 

(i) Waiver. A Party’s waiver of any breach or violation of any Agreement provisions shall not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement provision.

 

(j) Entire Agreement, Amendment, Binding Effect. This Agreement constitutes the entire agreement between the Parties concerning the subject matter in this Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Executive acknowledges and represents that in executing this Agreement, he did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. Any amendment to this Agreement must be signed by all Parties to this Agreement. This Agreement will be binding on and inure to the benefit of the Parties hereto and their respective successors, heirs, legal representatives, and permitted assigns (if any). This Agreement supersedes any prior agreements between Executive and the Company concerning the subject matter of this Agreement, including the Prior Agreement.

 

(k) Counterparts. This Agreement may be executed in counterparts, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

(l) Directors and Officers Insurance/Indemnification. During the Employment Period, the Company shall maintain Executive as an insured party on directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers. Either through its directors and officers insurance policy and pursuant to the terms thereof or, if such insurance is not available, otherwise, the Company will indemnify and hold Executive harmless against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or proceeding to which Executive is a party, or threat thereof, by reason of his being or having been an officer or director of the Company or any Affiliate, to the extent permitted by applicable law; provided, however, that this indemnity shall not apply if Executive is determined by a court of competent jurisdiction (whether it be through a determination issued in a jury trial, arbitration, administrative hearing or trial, or bench trial) to have acted against the interests of the Company with gross negligence, gross misconduct, or gross malfeasance. If such a determination is entered, Executive shall reimburse Company for all amounts Company or its insurer paid under this Section 12(l) concerning such matter or related matters within thirty (30) days of the entry of such determination. Promptly after receipt by Executive of notice of the commencement of any action (including any governmental action) or threat thereof, Executive shall, if a claim covered by this Section 12(l) is to be made or is threatened against Executive, deliver to the Company a written notice of the commencement or threat thereof, and the Company shall have the right to participate in, and, to the extent, the Company so desires to assume the defense thereof with counsel selected by the Company and approved by Executive (whose approval shall not be unreasonably withheld); provided, however, that Executive (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Company, if, and only if, representation of Executive by the counsel retained by the Company would be inappropriate due to actual or potential differing interests between Executive and any other party represented by such counsel in such proceeding. Executive’s failure to deliver written notice to the Company within a reasonable time of the commencement or threat of any action for which Executive seeks indemnification under this Section 12(1), if prejudicial to the Company’s ability to defend such action, shall relieve the Company of any liability to Executive under this Agreement.

 

 

13. Section 409A of the Code

 

(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (ii) Executive is deemed at the time of his separation from service to be a “specified employee” under Section 409A of the Code; and (iii) at the time of Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of Executive’s separation from service) shall not be made until the earlier of (A) the first day of the seventh month following Executive’s separation from service or (B) the date of Executive’s death following such separation from service. During any period that payment or payments to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per annum rate equal to the highest rate of interest applicable to six (6) month money market accounts offered by the following institutions: Citibank N.A., Wells Fargo Bank, NA., or Bank of America, on the date of such “separation from service.” Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 13 (together with accrued interest thereon) shall be paid to Executive or Executive’s beneficiary in one lump sum.

 

(b) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Executive to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions. 

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first indicated above.

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
/s/ John Silberstein
By:	John Silberstein
Title:	Chairman of the Compensation Committee of the Board of Directors
EXECUTIVE:
/s/ Jason Katz
Jason Katz

 

Signature Page

to Second Amended and Restated

Executive Employment Agreement

 

 

EXHIBIT A

 

WAIVER AND RELEASE OF CLAIMS

 

This Waiver and Release of Claims (“Release”), effective as of the ______________ (the “Effective Date”), is made and entered into by and between Jason Katz (“Employee”) and Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”). Terms used in this Release with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Second Amended and Restated Executive Employment Agreement made and entered into as of January 2, 2025 by and between the Company and Employee (the “Agreement”).

 

WHEREAS, Employee and the Company are parties to the Agreement; and

 

WHEREAS, Section 10 and Section 11 of the Agreement provide that Employee is entitled to certain payments and benefits upon separation from employment under certain circumstances specified in the Agreement if he signs a release agreement.

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and adequacy of which are acknowledged, Employee and the Company agree as follows:

 

1. Global Release. In consideration of the mutual promises contained in the Agreement, including the Company’s promises to pay Employee consideration under Section 10 or Section 11 of the Agreement, which are in addition to anything of value to which Employee is already entitled, Employee, on behalf of himself, his heirs, executors, successors and assigns, irrevocably and unconditionally releases, waives, and forever discharges the Company and all of either of their predecessors and all of their respective parents, divisions, subsidiaries, affiliates, joint venture partners, partners, and related companies, and their present and former agents, employees, officers, directors, attorneys, stockholders, plan fiduciaries, successors and assigns, including, without limitation, _________________________________ (collectively, the “Released Parties”), from any and all claims, demands, actions, causes of action, costs, fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which Employee has, had, or may have against the Released Parties relating to or arising out of his employment, or any terms of the Agreement, or any terms of the Prior Agreement from the Effective Date and up to and including the date Employee signs this Release. This Release includes, without limitation, claims at law or equity or sounding in contract (express or implied) or tort, claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, creed, disability, religion, military status, family status, marital status, partnership status, domestic violence, stalking and sex offense victim status, arrest and conviction record, predisposing genetic characteristic, alienage or citizenship status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including, without limitation, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the ADA Amendments Act of 2008, Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, the Civil Rights Acts of 1866 and/or 1871, 42 U.S.C. Section 1981, the Rehabilitation Act, the Family and Medical Leave Act, the Fair Labor Standards Act anti-retaliation provisions, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Lilly Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, the New York Labor Law, the New York State Civil Rights Law, the New York Workers’ Compensation Law, and the New York City Human Rights Law, all as amended and including all of their respective implementing regulations, any federal, state, local or municipal whistleblower protection or anti-retaliation statute or ordinance, or any other federal, state, local, or municipal laws of any jurisdiction), claims arising under the Employee Retirement Income Security Act (except any employee benefits or employee participation rights as contained in the Agreement), or any other statutory or common law claims related to or arising out of his employment or any terms of the Agreement, from the Effective Date and up to and including the date of this Release’s execution by Employee. Notwithstanding the foregoing, nothing in this Release shall affect or impair: (a) any rights Employee may have to indemnification, including without limitation indemnification for attorneys’ fees, costs and/or expenses, pursuant to applicable statute, certificates of incorporation and by-laws of the Company or any of its Affiliates; (b) any of Employee’s rights arising under the Agreement stated in Section 12 or the applicable section of Section 10 or Section 11; (c) any rights that Employee has as a former employee under the Company’s employee benefit plans (other than any severance plan); or (d) any rights Employee may have that cannot be waived as a matter of law.

 

2. No Admission of Liability. Employee understands and agrees that this Release shall not in any way be construed as an admission by the Released Parties of any unlawful or wrongful acts whatsoever against Employee or any other person. The Released Parties specifically disclaim any liability to or wrongful acts against Employee or any other person.

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

3. Time to Consider Release. Employee is hereby advised in writing by the Company that he should consult an attorney before executing this Release. Employee has a period of up to [twenty-one (21)/forty-five (45)] calendar days after receiving the Release within which to review and consider the provisions of this Release. Employee understands that if he does not sign this Release before the [twenty-one (21)/forty-five (45)] calendar day period expires, this Release offer will be withdrawn automatically.

 

[Additional information may be inserted if Employee’s employment ends as part of a layoff.]

 

4. Revocation Period. Employee understands and acknowledges that he has seven (7) calendar days following the execution of this Release to revoke his acceptance of this Release. This Release will not become effective or enforceable, and the payments and benefits described under Section 10 or Section 11 of the Agreement, as applicable, will not become payable, until after this revocation period has expired without his revocation. If Employee does not revoke the Release within the revocation period, the Company will commence the payments and benefits described under Section 10 or Section 11 of the Agreement, as applicable, as stated in Section 10(b) or Section 11(b) of the Agreement, as applicable.

 

5. Confidentiality of Release and Company Information. Employee agrees to keep this Release, its terms, and the amount of payments and benefits related to this Release completely confidential. Employee agrees and understands that he is prohibited from disclosing any terms of this Release to anyone, except that he may disclose the terms of this Release and the amount of the payments and benefits related to this Release to his spouse, attorneys, accountants, and financial advisors or as otherwise required by law. Employee also agrees to continue to abide by the confidentiality provisions of the Agreement.

 

6. Non-Disparagement and Other Continuing Obligations. Employee agrees to continue to abide by Section 6 (“Confidential Information”) and Section 7 (“Restrictive Covenants”) of the Agreement and any other surviving obligations of Employee as set forth in the Agreement, including, without limitation, Section 3 therein.

 

7. Agreement to Return Company Property/Documents. Employee understands and agrees that his last day of active work in any Company office or on any Company owned or leased property will be __________________, 20__ (the “Separation Date”). Accordingly, Employee agrees that: (a) he will not take with him, copy, alter, destroy, or delete any files, documents, electronically stored information, or other materials, whether or not embodying or recording any Confidential Information, including copies, without obtaining in advance the written consent of an authorized Company representative; and (b) he will promptly return to the Company all Confidential Information, documents, files, records and tapes, whether written in hardcopy form or electronically stored, that have been in his possession or control regarding the Company, and he will not use or disclose such materials in any way or in any format, including written information in any form, information stored by electronic means, and all copies of these materials. Employee further agrees that on or before the Separation Date, he will return to the Company immediately all Company property, including, without limitation, keys, equipment, computer(s) and computer equipment, devices, Company cellular phones, Company credit cards, data, electronically stored information, lists, correspondence, notes, memos, reports, or other writings prepared by the Company or himself on behalf of the Company without altering any such files or items (e.g., without wiping the cellular phone or computer) before returning them to the Company.

 

8. Authorized Use of Trade Secrets/ Confidential Information. Employee acknowledges and agrees that he is bound by Section 6 and Section 7 of the Agreement regardless of the reason for his separation from the Company or any of its Affiliates or any successor or assign. Notwithstanding the foregoing, Employee understands that Employee may disclose proprietary and/ or confidential information when required to do so by a court of competent jurisdiction, by any governmental agency having authority over Employee or the business of the Company or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order that Employee divulge, disclose or make accessible such information. The Company hereby notifies Employee in accordance with the Defend Trade Secrets Act of 2016 that Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Employee that if Employee files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Employee may disclose the Company’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

Nothing in this Release shall prohibit either party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the party.

 

Nothing in this Release shall prohibit any party or other person from the disclosure of any underlying facts or circumstances of any discrimination, harassment, or retaliation claim or from engaging in any actions protected by New York General Obligations Law § 5-336.

 

9. Knowing and Voluntary Release. Employee understands that it is his choice whether to enter into this Release and that his decision to do so is voluntary and is made knowingly.

 

10. No Prior Representations or Inducements. Employee represents and acknowledges that in executing this Release, he did not rely, has not relied, and expressly disavows reliance on any communications, statements, promises, inducements, or representation(s), oral or written, by any of the Released Parties, except as expressly contained in this Release.

 

11. Choice of Law. This Release shall, in all respects, be interpreted, enforced, and governed under the laws of the State of New York. The parties agree that the language of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for, or against, any of the parties.

 

12. Severability. The Company and Employee agree that should a court declare or determine that any provision of this Release is illegal or invalid, the validity of the remaining parts, terms or provisions of this Release will not be affected and any illegal or invalid part, term, or provision, will not be deemed to be a part of this Release.

 

13. Counterparts. The Company and Employee agree that this Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

 

Please read carefully as this document includes a release of claims, including a release of claims under the Age Discrimination in Employment Act (ADEA).

 

{Signature Page Follows}

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

IN WITNESS WHEREOF, the Company and Employee hereto evidence their agreement by their signatures.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
By:
Title:
EMPLOYEE:
Jason Katz

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

 

Exhibit 10.3

 

SECOND AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Second Amended and Restated Executive Employment Agreement (this “Agreement”) is entered into on January 2, 2025 (the “Execution Date”), by and between Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”), and Kara Jenny (“Executive”).

 

RECITALS

 

WHEREAS, the Company and Executive (collectively the “Parties” and each individually a “Party”) previously entered into that certain Amended and Restated Employment Agreement, dated as of March 23, 2022 (the “Prior Agreement”), and this Agreement amends and restates the Prior Agreement in its entirety;

 

Whereas, prior to the Execution Date, Executive was employed as the Company’s Chief Financial Officer;

 

Whereas, the Company desires to continue to employ Executive as its Chief Financial Officer, and Executive desires to be employed by the Company in such role;

 

Whereas, the Parties desire to set forth in writing the terms and conditions of their agreement and understandings with respect to the employment of Executive; and

 

Whereas, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, for the period and upon the terms and conditions contained in this Agreement.

 

Now, Therefore, in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1. Incorporation of Recitals; Agreement to Employ. The above recitals are hereby incorporated into this Agreement as if fully set forth herein. The Parties desire to enter into this Agreement to, among other things, set forth the terms of Executive’s employment with the Company. The Parties acknowledge that this Agreement supersedes the Prior Agreement and any other offer, agreement or promises made by anyone concerning any offer of employment by the Company, and this Agreement comprises the complete agreement between the Parties concerning Executive’s employment by the Company.

 

2. Term of Agreement. This Agreement shall be binding upon and enforceable against the Parties immediately when both Parties execute this Agreement. This Agreement’s stated term and the employment relationship created hereunder will begin on the Execution Date and will remain in effect for one (1) year, unless earlier terminated in accordance with Section 9 (the “Initial Employment Term”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each a “Renewal Term”), unless terminated by either Party upon written notice to the other Party given at least ten (10) business days before the end of the Initial Employment Term or any Renewal Term, as applicable, or unless earlier terminated in accordance with Section 9. The period during which Executive is employed under this Agreement (including the Initial Employment Term and any Renewal Term(s)) will be referred to as the “Employment Period.”

 

3. Surviving Agreement Provisions. Notwithstanding any provision of this Agreement to the contrary, the Parties’ respective rights and obligations under Sections 6 through 12 shall survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

 

4. Services to be Provided by Executive.

 

(a) Position and Responsibilities. Executive’s services hereunder will commence as of the Execution Date. Subject to this Agreement’s terms, Executive agrees to serve the Company as its Chief Financial Officer. Executive shall have the duties and privileges customarily associated with executives occupying the role of Chief Financial Officer, and Executive shall perform all reasonable acts customarily associated with such roles, or necessary and/or desirable to protect and advance the best interests of the Company. Executive will report to the Company’s Chief Executive Officer. Executive agrees to devote a substantial portion of her business time, as is customary for such position, to the business of the Company (except as provided below).

 

 

(b) Executive’s Employment Representations. Executive agrees that she (i) shall not serve as a member of any board of directors, or as a trustee of, or in any manner be affiliated with, any present or future agency or organization (except for Central Lathing, LLC and civic, religious, and not for profit organizations) without the prior written consent of the Company’s Board of Directors (the “Board”) (which consent will not be unreasonably withheld); (ii) will serve as an executive of the Company; and (iii) shall not, directly or indirectly, have any interest in, or perform any services for, any business competing with or similar in nature to the Company’s business as set forth in Section 7. For the avoidance of doubt, Executive’s relationship with Central Lathing, LLC does not violate this Section 4(b)(iii). Executive further represents to the Company that (A) she is not violating and will not violate any contractual, legal, or fiduciary obligations or burdens to which Executive is subject by entering into this Agreement or providing services under this Agreement’s terms; (B) Executive is under no contractual, legal, or fiduciary obligation or burden that she will allow to interfere with Executive’s ability to perform services under this Agreement’s terms; and (C) she has no bankruptcies, convictions, disputes with regulatory agencies, or other disclosable or disqualifying events that would impact the Company or its ability to conduct securities offerings. Notwithstanding anything to the contrary herein, nothing shall prevent or restrict Executive’s ownership of, serving as a board member or a trustee for, or providing services (in any capacity) to, any entity (or derivative thereof) for which she currently has an equity interest and provides such services, provided that such activities: (1) do not reasonably interfere with her provision of services to the Company and (2) except for Central Lathing, LLC, such entities are not competing businesses with the Company as set forth in Section 7.

 

5. Compensation for Services. As compensation for the services Executive will perform under this Agreement, the Company will pay Executive during the Employment Period, and Executive shall accept as full compensation, the following:

 

(a) Base Salary. Executive shall receive an annualized base salary (“Base Salary”) of Three Hundred Ten Thousand Dollars (US $310,000), commencing as of the Execution Date (and retroactive to January 1, 2025), prorated for any partial years of employment with the Company. Additionally, the Board will review Executive’s Base Salary at least annually during the Employment Period, and, in the sole discretion of the Board, may increase (but not decrease) such Base Salary from time to time, but shall not be obligated to effectuate such an increase. Executive’s compensation shall be subject to all appropriate federal and state withholding taxes and shall be payable in accordance with the Company’s normal payroll procedures.

 

(b) Bonus Compensation. Annual incentive bonuses awarded to Executive for any calendar year during the Employment Period shall be determined by the Board, based on criteria to be established jointly by the Board and Executive and communicated to Executive in writing. Each such annual incentive bonus, if any, shall be payable during the annual review period (generally January or February) in the calendar year following the calendar year to which the annual incentive bonus relates, provided Executive is employed by the Company on such payment date. 

 

(c) Vacation. During the Employment Period, Executive shall be entitled to four (4) weeks paid vacation annually. Vacation shall be taken at such times and intervals as shall be determined by Executive, subject to the reasonable business needs of the Company. Upon the termination of Executive’s employment, for any reason, Executive will forfeit any accrued but unused vacation, resulting in no accrued, unused vacation being paid to Executive.

 

(d) Other Benefits and Perquisites. Executive shall be entitled to participate in the benefit plans provided by the Company for all employees generally and for the Company’s executive employees. The Company shall be entitled to change or terminate these plans in its sole discretion at any time. Any reimbursement of expenses made under this Agreement shall only be made for eligible expenses incurred during the Employment Period, and no reimbursement of any expense shall be made by the Company after December 31st of the year following the calendar year in which the expense was incurred. The amount eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and the right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit. Executive will comply with the Company’s policies regarding these benefits, including all Internal Revenue Service rules and requirements.

 

 

(e) Withholdings and Deductions. The compensation described in this Section 5 is subject to all legally required and authorized withholdings and deductions.

 

6. Confidential Information.

 

(a) Confidential Information. Executive acknowledges and agrees that during Executive’s engagement with the Company, whether as an owner, employee, or otherwise, the Company has provided and shall continue to provide Executive with confidential information and trade secrets of the Company (hereinafter referred to as “Confidential Information”) and shall place Executive in a position to develop and have ongoing access to Confidential Information of the Company, shall entrust Executive with business opportunities of the Company, and shall place, and has placed, Executive in a position to develop business goodwill on behalf of the Company. For purposes of this Agreement, all references to “the Company” include any predecessor thereto and Confidential Information includes, but is not limited to:

 

i.

Technologies developed by the Company and any research data or other documentation related to the development of such technologies, including all designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, developed or acquired by Executive, individually or in conjunction with others during the period of Executive’s engagement with the Company, whether as an owner, employee, or otherwise;

 

ii.

All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, logs, drawings, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression that are conceived, developed or acquired by Executive individually or in conjunction with others while Executive is employed or otherwise engaged by, or owns an ownership interest in, the Company (whether during business hours or otherwise and whether on any Company premises or otherwise) that relate to the Company’s business, trade secrets, products or services;

 

iii.

Customer lists and prospect lists developed by the Company or Executive;

 

iv.

Information regarding the Company’s customers which Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information, and other information regarding the customer’s business;

 

v.

Information related to the Company’s business, including but not limited to, marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

 

vi.

Training materials developed by and utilized by the Company; and

 

vii.

Any other information that Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, and which Executive has a reasonable basis to believe the Company would not want disclosed to a business competitor or to the general public, regardless of whether Executive received or had possession of the information before or after the Execution Date and including, without limitation, trade secrets.

 

 

Executive understands and acknowledges that such Confidential Information gives the Company a competitive advantage over others who do not have the information, and that the Company would be harmed if the Confidential Information were disclosed.

 

The Company hereby notifies Executive in accordance with the Defend Trade Secrets Act of 2016 that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Executive that if Executive files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Agreement shall prohibit either Party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the Party.

 

(b) Disclosure of Confidential Information. Executive agrees that she shall hold all Confidential Information in trust for the Company and shall not during or after her employment terminates for any reason: (i) use the information for any purpose other than the benefit of the Company; or (ii) disclose to any person or entity any Confidential Information of the Company except as necessary during Executive’s employment with the Company to perform services on behalf of the Company. Executive shall also take reasonable steps to safeguard such Confidential Information and to prevent its disclosure to unauthorized persons.

 

(c) Return of Information. Upon termination of employment, or at any earlier time as directed by the Company, Executive shall immediately deliver to the Company any and all Confidential Information in Executive’s possession, any other documents or information that Executive acquired as a result of her employment with the Company and any copies of any such documents/information. Executive shall not retain any originals or copies of any documents or materials related to the Company’s business, which Executive came into possession of or created as a result of her employment with the Company. Executive acknowledges that such information, documents and materials are the exclusive property of the Company. In addition, upon termination of employment, or at any time earlier as directed by the Company, Executive shall immediately deliver to the Company any property of the Company in Executive’s possession.

 

7. Restrictive Covenants. In consideration for the Company’s promise to provide Confidential Information to Executive, the substantial economic investment made by the Company in the Confidential Information, trade secrets and goodwill of the Company (including, without limitation, customer relationships), and the business opportunities disclosed or entrusted to Executive, the compensation and other benefits provided by the Company to Executive, and the Company’s employment of Executive pursuant to this Agreement, and to protect the Confidential Information, trade secrets and Company goodwill (including, without limitation, customer relationships), Executive agrees to enter into the following restrictive covenants.

 

(a) Non-Competition. Executive agrees that, during the Employment Period and during the Non-Competition Period (defined below), other than in connection with her duties under this Agreement and her obligations to Central Lathing, LLC, she shall not, without the prior written consent of the Board, directly or indirectly, either individually or as a principal, partner, stockholder, manager, agent, consultant, contractor, employee, lender, investor, or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, become employed by, control, carry on, join, lend money for, operate, engage in, establish, perform services for, invest in, solicit investors for, or consult for any person or entity engaged, or preparing to engage, in the Business (defined below) or any portion thereof within the Restricted Area (defined below). Notwithstanding the foregoing, Executive shall be permitted during the Employment Period to own, directly or indirectly, solely as an investment, securities of any organization or entity that are traded on any national securities exchange or the over-the-counter market if Executive is not the controlling shareholder or a member of a group that controls such organization or entity, and directly or indirectly, does not own three percent (3%) or more of any class of securities of such organization or entity.

 

 

For purposes of this Agreement, the following definitions shall apply:

 

i.

“Affiliate” has the meaning set forth in Section 11(a).

 

ii.

“Business” means the business in which the Company is actually engaged or has taken material steps to engage in as of the date Executive’s employment with the Company terminates for any reason.

 

iii.

“Company” means Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.) and any current or future Affiliates.

 

iv.

“Non-Competition Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

v.

“Non-Solicitation Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

vi.

“Person” has the meaning set forth in Section 11(a).

 

vii.

“Restricted Area” means, because the Company’s business is nationwide, Executive’s responsibilities are nationwide in scope, and Executive has access to the Confidential Information on a nationwide basis, all States comprising the United States, and any other geographic area in which the Company conducts business and for which Executive has responsibilities during Executive’s employment.

 

(b) Non-Solicitation. Executive agrees that, during the Employment Period and during the Non-Solicitation Period, other than in connection with her duties under this Agreement and for the benefit of the Company during the Employment Period, Executive shall not, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether personally or through other persons, (i) solicit business from, interfere with, attempt to solicit business with, or do business with any customer of the Company with whom the Company did business or who the Company solicited within the preceding two (2) years, and who or which: (A) Executive contacted, called on, serviced or did business with during Executive’s employment with the Company; (B) Executive learned of solely as a result of Executive’s employment with the Company; or (C) about whom Executive received Confidential Information; (ii) interfere with any relationship between the Company or any of its Affiliates and any supplier, provided that Executive has knowledge that such supplier is a supplier of the Company or any of its Affiliates; or (iii) solicit, induce or attempt to solicit or induce, engage or hire, on behalf of herself or any other person or entity, any person who is an employee or consultant of the Company or who was employed by the Company within the preceding twelve (12) months. The Parties acknowledge and agree that, for purposes of this Agreement, the term “customer” in this Section 7(b) does not include actual or potential consumers or users of the Company’s applications. The restriction in this Section 7(b) applies only to solicitation for, interference on behalf of, attempts to solicit business for, or doing business with a business that is competitive with any portion of the Business (as defined above) of the Company or any Affiliate thereof.

 

(c) Non-Disparagement. Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company and its Affiliates which were obtained through great costs, time and effort. Therefore, Executive agrees that during her employment and at all times after the termination of her employment for any reason, Executive shall not in any way, directly or indirectly, publicly disparage, libel or defame the Company, its beneficial owners or its Affiliates, or any of either the Company’s or any of its Affiliates’ respective businesses or business practices, products services, employees, or contractors.

 

(d) Tolling. If Executive violates any of the restrictions contained in Section 7(a) or Section 7(b), the Non-Competition Period and/or the Non-Solicitation Period, as applicable, shall be suspended and will not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation to the reasonable satisfaction of the Company.

 

 

(e) Remedies. Executive acknowledges that the restrictions contained in Sections 6 and 7 of this Agreement, in view of the nature of the Company’s business, trade secrets, the Confidential Information and business goodwill (including, without limitation, customer relationships) and her position with the Company, are reasonable and necessary to protect the Company’s legitimate business interests and that any violation of Sections 6 or 7 of this Agreement would result in irreparable injury to the Company. In the event of a breach by Executive of Sections 6 or 7 of this Agreement, then the Company shall be entitled to (i) a temporary restraining order and injunctive relief restraining Executive from the commission of any breach, and/or (ii) recover attorneys’ and witness fees, expenses and costs the Company incurs in such action. Further, if the Company prevails in any action brought by Executive (or anyone acting on her behalf) seeking to declare any term in Sections 6 or 7 void or unenforceable or subject to reduction or modification, then the Company shall be entitled to recover attorneys’ and witness fees, expenses and costs the Company incurs in such action.

 

(f) Reformation. The courts shall be entitled to modify the duration and scope of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as modified shall be enforceable. Executive acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the Company’s investment in its businesses, trade secrets, Confidential Information and the goodwill (including, without limitation, customer relationships) thereof. Executive acknowledges that the scope and duration of the restrictions contained herein are necessary and reasonable in light of the time that Executive has been engaged in the business of the Company, Executive’s reputation in the markets for the Company’s business and Executive’s relationship with the suppliers, customers and clients of the Company.

 

8. Trading Restrictions. Executive will be subject to trading and sales volume limitations in accordance with (a) applicable law, including Rule 144 under the Securities Act of 1933, as amended; and (b) such written insider trading policies as the Board may adopt and promulgate for Company employees generally.

 

9. Termination of Agreement. The employment relationship between Executive and the Company created under this Agreement and the Employment Period shall terminate upon the occurrence of any one of the following events:

 

(a) Death or Permanent Disability. Executive’s employment hereunder shall be terminated effective on the death or permanent disability of Executive. For this purpose, “permanent disability” shall mean that Executive, (i) in the opinion of a physician, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company, (iii) is determined to be totally disabled by the Social Security Administration, or (iv) is determined to be disabled in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the requirements of (i) or (ii) above.

 

(b) Termination for Cause. The Company shall have the option to terminate Executive’s employment, effective upon written notice of such termination to Executive, for Cause as the Company determines. Under this Agreement, termination for “Cause” means the Company’s termination of Executive’s employment upon the occurrence of any of the following events:

 

i.

Any act of fraud, misappropriation or embezzlement by Executive regarding any aspect of the Company’s or any of its Affiliates’ businesses;

 

ii.

The material breach by Executive of any Agreement provision and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

 

iii.

The conviction of Executive by a court of competent jurisdiction of a felony or a crime involving moral turpitude;

 

iv.

The intentional and material breach by Executive of any non-disclosure or non-competition/non-solicitation/non-interference provision of any agreement to which Executive and the Company or any of its current or future Affiliates are parties;

 

v.

The substantial failure by Executive to perform in all material respects her duties and responsibilities (other than as a result of death or permanent disability) and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

vi.

The failure or refusal of Executive to follow the lawful directives of the Board, which, if curable, Executive fails or refuses to cure within thirty (30) days after written demand is delivered;

 

vii.

Willful conduct by Executive that is materially injurious to the Company or any of its Affiliates;

 

viii.

Acceptance of employment with any employer other than the Company except upon written permission of the Board; or

 

ix.

The breach by Executive of any of her fiduciary duties to the Company.

 

Prior to any termination for Cause, the Company shall give Executive an opportunity to appear before the Board (with personal counsel, if Executive so chooses) in order to be heard on the matter. The Company shall provide Executive with a written notice of termination, which can be provided on the date of termination. In the event Executive’s employment is terminated for Cause under this Agreement, Executive shall be entitled to the compensation provided in Section 10(a) below.

 

(c) Termination by the Company without Cause. The Company may terminate Executive’s employment without Cause at any time upon ten (10) days’ written notice to Executive, during which period Executive shall not be required to perform any services for the Company other than to assist the Company in training her successor and generally preparing for an orderly transition; provided, however, that Executive shall be entitled to compensation upon such termination as provided in Sections 10(a) and (b) below.

 

(d) Termination by Executive for Good Reason. Executive may terminate her employment at any time for Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the following without Executive’s prior written consent: (i) Executive’s being required to regularly report to a regular place of employment outside New York, New York; (ii) the Company’s material breach of any of the terms and conditions of this Agreement; or (iii) a detrimental and material change in Executive’s title, compensation, duties, or responsibilities; provided, however, that within ninety (90) days following Executive’s learning of such Good Reason, (A) the Company shall be given written notice of Executive’s intent to terminate her employment under this paragraph, and (B) the Company shall have ten (10) days from receipt of such written notice to cure any such breach, requirement to regularly report, or change to the reasonable satisfaction of Executive. Upon such termination for Good Reason, Executive shall be entitled to compensation as provided in Sections 10(a) and (b) below.

 

(e) Termination by Executive Other Than for Good Reason. Executive may terminate her employment other than for Good Reason at any time upon forty-five (45) days’ written notice to the Company. Upon termination of this Agreement, the Company shall have no obligation to Executive other than as set forth in Section 10(a).

 

(f) Separation from Service. For purposes of this Agreement, including, without limitation, Sections 10 and 11, any references to a termination of Executive’s employment shall mean a “separation from service” as defined by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations and other guidance issued thereunder.

 

 

10. Compensation Upon Termination. Upon the termination of Executive’s employment under this Agreement before the expiration of the end of the stated term in this Agreement, Executive shall be entitled to the following:

 

(a) Compensation Upon Termination for Any Reason. Upon termination of Executive’s employment during the Employment Period before the expiration of the end of the stated term hereof for any reason or upon expiration of the stated term, Executive shall be entitled to the following within thirty (30) days of such termination:

 

i.

Accrued Base Salary. The Base Salary earned by her before the effective date of termination as provided in Section 5(a) that is unpaid (including salary payable during any applicable notice period), prorated on the basis of the number of full days of service rendered by Executive during the salary payment period to the effective date of termination; and

 

ii.

Unreimbursed Business Expenses; Company Benefit Plans. Any unreimbursed reasonable business expenses and any amounts to which Executive is entitled to under the Company’s benefit plans in accordance with their terms.

 

(b) Additional Compensation and Benefits Upon Non-Renewal by the Company or Upon Termination by the Company Without Cause or by Executive for Good Reason. If, at any time, (i) the Company elects not to renew this Agreement for any Renewal Term and Executive’s employment terminates as a result of such non-renewal, (ii) the Company terminates Executive’s employment without Cause (as defined in Section 9(b) above), or (iii) Executive terminates her employment for Good Reason (as defined in Section 9(d) above), then the Company shall, subject to Executive’s execution of a general release of claims in favor of the Company and subject to Executive’s compliance with Section 6 and Section 7, provide to Executive, in addition to the amounts set forth in Section 10(a) above, an amount equal to one (1) times the Executive’s then-current annualized Base Salary, less the amount of all compensation paid to Executive during the then-current term of this Agreement; provided, however, that in no event shall such payment equal less than four (4) months of the Executive’s then-current annualized Base Salary. Such payment shall be payable in equal installments over the balance of the then-current term of this Agreement, payable in accordance with the Company’s regularly scheduled payroll and commencing on the Company’s first regular payroll date that is five (5) days after the release of claims provided by Executive has become effective and binding upon Executive, provided, that, if the maximum forty-five (45) day consideration period and revocation period described in Section 10(d) spans two (2) tax years, then the payments shall commence in the second tax year. Additionally, if Executive is eligible and timely elects to continue her health insurance coverage pursuant to the COBRA statute, and subject to Executive’s execution of the release of claims referred to above, the Company will continue to pay its portion of Executive’s monthly health insurance premiums for the earlier of (A) the remainder of the then-current Term of this Agreement, or (B) the date Executive’s coverage under such group health plans terminates for any reason; provided that the Company’s payment of such premiums shall be limited to the same proportion of the cost of coverage under the Company’s group health plans as the Company pays on behalf of its employees generally (the “COBRA Entitlement”).

 

Executive shall have no obligation to mitigate any severance obligation of the Company under this Agreement by seeking new employment. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Agreement by the amount of earnings or benefits received by Executive in future employment.

 

Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of her employment, Executive’s rights and benefits under each of these plans, if any, shall be determined in accordance with the terms, conditions, and limitations of the plans and any separate agreement executed by Executive which may then be in effect.

 

(c) Penalty for Breach of Covenants. For any period of time that Executive is in breach of, or threatens to breach, Section 7, the Company shall not be obligated to pay any payments referenced in Section 10(b) of this Agreement, the Company’s payment obligations referenced in Section 10(b) of this Agreement shall terminate and expire, and the Company shall have no further obligations to Executive from and after the date of such breach or threatened breach. Additionally, the Company may recover any payments previously paid under Section 10(b) of this Agreement for the period of time that Executive was in breach of Section 7, save and except for $100, which $100 the Parties agree is sufficient consideration for the Waiver and Release of Claims referred to in Section 10(d). In addition, the Company shall have all other rights and remedies available under this Agreement, any other agreement, at law, or in equity.

 

 

(d) Release. Payment of any of the amounts described in this Section 10 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion of it during any applicable revocation period.

 

11. Compensation Upon Change in Control.

 

(a) Change in Control. For purposes of this Agreement, a “Change in Control” of the Company occurs upon a change in the Company’s ownership or the ownership of a substantial portion of its assets, as follows:

 

i.

Change in Ownership. A change in ownership of the Company occurs on the date that any Person, other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding stock pursuant to an offering of such stock, or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the Company’s stock, acquires ownership of the Company’s stock that, together with stock held by such Person, constitutes more than 50% of the total fair market value or total voting power of the Company’s stock. However, if any Person is considered to own already more than 50% of the total fair market value or total voting power of the Company’s stock, the acquisition of additional stock by the same Person is not considered to be a Change of Control.

 

ii.

Change in Ownership of Substantial Portion of Assets. A change in the ownership of a substantial portion of the Company’s assets occurs on the date that a Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person) all or a substantial portion of the assets of the Company, by reason of any sale, lease, exchange or other transfer of the assets of the Company. For purposes hereof, a “substantial portion of the assets of the Company” shall mean any portion of the Company’s overall assets representing more than fifty percent (50%) of the fair market value of the Company’s overall assets. However, there is no Change in Control when there is such a transfer to an entity that is controlled by the stockholders of the Company immediately after the transfer, through a transfer to (A) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock; (B) an entity, at least 50% of the total value or voting power of the stock of which is owned, directly or indirectly, by the Company; (C) a Person that owns directly or indirectly, at least 50% of the total value or voting power of the Company’s outstanding stock; or (D) an entity, at least 50% of the total value or voting power of the stock of which is owned by a Person that owns, directly or indirectly, at least 50% of the total value or voting power of the Company’s outstanding stock.

 

“Person” shall have the meaning given in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (“the Code”). Person shall include more than one Person acting as a group as defined by the Treasury Regulations issued under Section 409A of the Code.

 

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

 

The provisions of this Section 11(a) shall be interpreted in accordance with the requirements of the Treasury Regulations under Section 409A of the Code, it being the intent of the Parties that this Section 11(a) shall be in compliance with the requirements of said Code Section and said Treasury Regulations.

 

 

(b) Benefits Upon Termination Following Change in Control During the Employment Period.

 

i.

Severance Benefits. If, during the thirty (30) day period immediately prior to a Change in Control or during the one-year period beginning on the date of a Change in Control (the “Change Period”), (A) Executive’s employment is terminated by the Company (or by the acquiring or successor business entity following a Change in Control) other than for Cause (as defined in Section 9(b) above), or (B) Executive terminates her employment with the Company (or with the acquiring or successor business entity following a Change in Control) for Good Reason (as defined in Section 9(d) above), then Executive shall receive, in lieu of the severance benefits described in Section 10(b) above and subject to Executive’s execution of a general release of claims as provided in Section 11(d) below, a severance benefit in an amount equal to twelve (12) months of Executive’s annualized Base Salary (specified in Section 5(a)) as in effect on the date of the Change in Control plus twelve (12) months of the COBRA Entitlement.

 

ii.

No Payments Upon Breach. The Company shall have no obligation to provide any payments under this Section 11 if Executive is in breach or violation of any of the covenants contained in Section 7, which are applicable to Executive at the time of the payments.

 

iii.

No Duplication of Payment. The payment of amounts under this Section 11 shall be in lieu of, and not in addition to, any payments under Section 10(b).

 

iv.

Time and Form of Payment. Except as otherwise provided by Section 12, the Company shall pay the severance amount referenced in Section 11(b)(i) in a lump sum on the date that is sixty (60) days after the date of Executive’s termination of employment.

 

v.

Treatment of Equity Awards. Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of her employment, Executive’s rights and benefits under each such plan shall be determined in accordance with the terms, conditions, and limitations of the plan and any separate agreement executed by Executive which may then be in effect.

 

(c) No Mitigation or Offset. Executive shall not be required to mitigate the amount of any payment provided for in this Section 11 by seeking other employment or otherwise. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Section 11 by the amount of earnings or benefits received by Executive in future employment.

 

(d) Release. Payment of any of the amounts described in this Section 11 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company and any subsequent employment period with any acquiring or successor business entity following a Change in Control, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion thereof during any applicable revocation period.

 

12. Other Provisions.

 

(a) Remedies; Legal Fees. Each of the Parties to this Agreement shall be entitled to enforce her or its rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in her or its favor. In any action resulting from a breach of this Agreement, the prevailing Party shall be entitled to recover her or its reasonable attorneys’ fees.

 

 

(b) Limitations on Assignment. In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute. Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the explicit written consent of the Company. Any attempted assignment by Executive in violation of this Section 12(b) shall be void. Except as provided in this Agreement, nothing in this Agreement entitles any person other than the Parties to this Agreement to any claim, cause of action, remedy, or right of any kind, including, without limitation, the right of continued employment; provided, however, that the Company may freely assign this Agreement, and/or any rights hereunder, to any Affiliate or to any other entity. Further, to the extent applicable, each Affiliate of the Company will be deemed a third-party beneficiary and may enforce the applicable rights and obligations under this Agreement. The Company’s assignees or successors are expressly authorized to enforce the Company’s rights and privileges hereunder, including without limitation the restrictive covenants set forth in Section 6 and Section 7.

 

(c) Severability and Reformation. The Parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 12(c).

 

(d) Notices. Any notice or other communication required, permitted or desired to be given under this Agreement shall be deemed delivered when personally delivered; the business day, if delivered by overnight courier; the same day, if transmitted by facsimile on a business day before noon, Eastern Standard Time; the next business day, if otherwise transmitted by facsimile; and the third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as addressed or transmitted as follows (or to such subsequent addresses as the Parties may give one another notice of):

 

If to Executive, at the last address for her on record with the Company. If to the Company:

 

Intelligent Protection Management Corp.

30 Jericho Executive Plaza

Suite 400E

Jericho, NY 11753

 

(e) Further Acts. Whether or not specifically required under the terms of this Agreement, each Party shall execute and deliver such documents and take such further actions as shall be necessary in order for such Party to perform all of her or its obligations specified in this Agreement or reasonably implied from this Agreement’s terms.

 

(f) Publicity and Advertising. Executive agrees that the Company may use her name, picture, or likeness for any advertising, publicity or other business purpose at any time, during the term of this Agreement and may continue to use materials generated during the term of this Agreement for a period of six (6) months thereafter. The use of Executive’s name, picture, or likeness shall not be deemed to result in any invasion of Executive’s privacy or in violation of any property right Executive may have; and Executive shall receive no additional consideration if her name, picture or likeness is so used. Executive further agrees that any negatives, prints or other material for printing or reproduction purposes prepared in connection with the use of her name, picture or likeness by the Company shall be and are the sole property of the Company.

 

(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.

 

(h) Venue. The exclusive venue for all suits or proceedings arising from or related to this Agreement shall be in a court of competent jurisdiction in Nassau County, New York.

 

 

(i) Waiver. A Party’s waiver of any breach or violation of any Agreement provisions shall not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement provision.

 

(j) Entire Agreement, Amendment, Binding Effect. This Agreement constitutes the entire agreement between the Parties concerning the subject matter in this Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Executive acknowledges and represents that in executing this Agreement, she did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. Any amendment to this Agreement must be signed by all Parties to this Agreement. This Agreement will be binding on and inure to the benefit of the Parties hereto and their respective successors, heirs, legal representatives, and permitted assigns (if any). This Agreement supersedes any prior agreements between Executive and the Company concerning the subject matter of this Agreement, including the Prior Agreement.

 

(k) Counterparts. This Agreement may be executed in counterparts, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

(l) Directors and Officers Insurance/Indemnification. During the Employment Period, the Company shall maintain Executive as an insured party on directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers. Either through its directors and officers insurance policy and pursuant to the terms thereof or, if such insurance is not available, otherwise, the Company will indemnify and hold Executive harmless against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or proceeding to which Executive is a party, or threat thereof, by reason of her being or having been an officer or director of the Company or any Affiliate, to the extent permitted by applicable law; provided, however, that this indemnity shall not apply if Executive is determined by a court of competent jurisdiction (whether it be through a determination issued in a jury trial, arbitration, administrative hearing or trial, or bench trial) to have acted against the interests of the Company with gross negligence, gross misconduct, or gross malfeasance. If such a determination is entered, Executive shall reimburse Company for all amounts Company or its insurer paid under this Section 12(l) concerning such matter or related matters within thirty (30) days of the entry of such determination. Promptly after receipt by Executive of notice of the commencement of any action (including any governmental action) or threat thereof, Executive shall, if a claim covered by this Section 12(l) is to be made or is threatened against Executive, deliver to the Company a written notice of the commencement or threat thereof, and the Company shall have the right to participate in, and, to the extent, the Company so desires to assume the defense thereof with counsel selected by the Company and approved by Executive (whose approval shall not be unreasonably withheld); provided, however, that Executive (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Company, if, and only if, representation of Executive by the counsel retained by the Company would be inappropriate due to actual or potential differing interests between Executive and any other party represented by such counsel in such proceeding. Executive’s failure to deliver written notice to the Company within a reasonable time of the commencement or threat of any action for which Executive seeks indemnification under this Section 12(1), if prejudicial to the Company’s ability to defend such action, shall relieve the Company of any liability to Executive under this Agreement.

 

13. Section 409A of the Code

 

(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (ii) Executive is deemed at the time of her separation from service to be a “specified employee” under Section 409A of the Code; and (iii) at the time of Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of Executive’s separation from service) shall not be made until the earlier of (A) the first day of the seventh month following Executive’s separation from service or (B) the date of Executive’s death following such separation from service. During any period that payment or payments to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per annum rate equal to the highest rate of interest applicable to six (6) month money market accounts offered by the following institutions: Citibank N.A., Wells Fargo Bank, NA., or Bank of America, on the date of such “separation from service.” Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 13 (together with accrued interest thereon) shall be paid to Executive or Executive’s beneficiary in one lump sum.

 

(b) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Executive to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions. 

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first indicated above.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
/s/ John Silberstein
By:	John Silberstein
Title:	Chairman of the Compensation Committee of the Board of Directors

  

EXECUTIVE:
/s/ Kara Jenny
Kara Jenny

 

Signature Page

to Second Amended and Restated

Executive Employment Agreement

 

 

EXHIBIT A

 

WAIVER AND RELEASE OF CLAIMS

 

This Waiver and Release of Claims (“Release”), effective as of the ______________ (the “Effective Date”), is made and entered into by and between Kara Jenny (“Employee”) and Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”). Terms used in this Release with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Second Amended and Restated Executive Employment Agreement made and entered into as of January 2, 2025 by and between the Company and Employee (the “Agreement”).

 

WHEREAS, Employee and the Company are parties to the Agreement; and

 

WHEREAS, Section 10 and Section 11 of the Agreement provide that Employee is entitled to certain payments and benefits upon separation from employment under certain circumstances specified in the Agreement if she signs a release agreement.

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and adequacy of which are acknowledged, Employee and the Company agree as follows:

 

1. Global Release. In consideration of the mutual promises contained in the Agreement, including the Company’s promises to pay Employee consideration under Section 10 or Section 11 of the Agreement, which are in addition to anything of value to which Employee is already entitled, Employee, on behalf of herself, her heirs, executors, successors and assigns, irrevocably and unconditionally releases, waives, and forever discharges the Company and all of either of their predecessors and all of their respective parents, divisions, subsidiaries, affiliates, joint venture partners, partners, and related companies, and their present and former agents, employees, officers, directors, attorneys, stockholders, plan fiduciaries, successors and assigns, including, without limitation, _________________________________ (collectively, the “Released Parties”), from any and all claims, demands, actions, causes of action, costs, fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which Employee has, had, or may have against the Released Parties relating to or arising out of her employment, or any terms of the Agreement, or any terms of the Prior Agreement from the Effective Date and up to and including the date Employee signs this Release. This Release includes, without limitation, claims at law or equity or sounding in contract (express or implied) or tort, claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, creed, disability, religion, military status, family status, marital status, partnership status, domestic violence, stalking and sex offense victim status, arrest and conviction record, predisposing genetic characteristic, alienage or citizenship status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including, without limitation, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the ADA Amendments Act of 2008, Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, the Civil Rights Acts of 1866 and/or 1871, 42 U.S.C. Section 1981, the Rehabilitation Act, the Family and Medical Leave Act, the Fair Labor Standards Act anti-retaliation provisions, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Lilly Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, the New York Labor Law, the New York State Civil Rights Law, the New York Workers’ Compensation Law, and the New York City Human Rights Law, all as amended and including all of their respective implementing regulations, any federal, state, local or municipal whistleblower protection or anti-retaliation statute or ordinance, or any other federal, state, local, or municipal laws of any jurisdiction), claims arising under the Employee Retirement Income Security Act (except any employee benefits or employee participation rights as contained in the Agreement), or any other statutory or common law claims related to or arising out of her employment or any terms of the Agreement, from the Effective Date and up to and including the date of this Release’s execution by Employee. Notwithstanding the foregoing, nothing in this Release shall affect or impair: (a) any rights Employee may have to indemnification, including without limitation indemnification for attorneys’ fees, costs and/or expenses, pursuant to applicable statute, certificates of incorporation and by-laws of the Company or any of its Affiliates; (b) any of Employee’s rights arising under the Agreement stated in Section 12 or the applicable section of Section 10 or Section 11; (c) any rights that Employee has as a former employee under the Company’s employee benefit plans (other than any severance plan); or (d) any rights Employee may have that cannot be waived as a matter of law.

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

2. No Admission of Liability. Employee understands and agrees that this Release shall not in any way be construed as an admission by the Released Parties of any unlawful or wrongful acts whatsoever against Employee or any other person. The Released Parties specifically disclaim any liability to or wrongful acts against Employee or any other person.

 

3. Time to Consider Release. Employee is hereby advised in writing by the Company that she should consult an attorney before executing this Release. Employee has a period of up to [twenty-one (21)/forty-five (45)] calendar days after receiving the Release within which to review and consider the provisions of this Release. Employee understands that if she does not sign this Release before the [twenty-one (21)/forty-five (45)] calendar day period expires, this Release offer will be withdrawn automatically.

 

[Additional information may be inserted if Employee’s employment ends as part of a layoff.]

 

4. Revocation Period. Employee understands and acknowledges that she has seven (7) calendar days following the execution of this Release to revoke her acceptance of this Release. This Release will not become effective or enforceable, and the payments and benefits described under Section 10 or Section 11 of the Agreement, as applicable, will not become payable, until after this revocation period has expired without her revocation. If Employee does not revoke the Release within the revocation period, the Company will commence the payments and benefits described under Section 10 or Section 11 of the Agreement, as applicable, as stated in Section 10(b) or Section 11(b) of the Agreement, as applicable.

 

5. Confidentiality of Release and Company Information. Employee agrees to keep this Release, its terms, and the amount of payments and benefits related to this Release completely confidential. Employee agrees and understands that she is prohibited from disclosing any terms of this Release to anyone, except that she may disclose the terms of this Release and the amount of the payments and benefits related to this Release to her spouse, attorneys, accountants, and financial advisors or as otherwise required by law. Employee also agrees to continue to abide by the confidentiality provisions of the Agreement.

 

6. Non-Disparagement and Other Continuing Obligations. Employee agrees to continue to abide by Section 6 (“Confidential Information”) and Section 7 (“Restrictive Covenants”) of the Agreement and any other surviving obligations of Employee as set forth in the Agreement, including, without limitation, Section 3 therein.

 

7. Agreement to Return Company Property/Documents. Employee understands and agrees that her last day of active work in any Company office or on any Company owned or leased property will be __________________, 20__ (the “Separation Date”). Accordingly, Employee agrees that: (a) she will not take with her, copy, alter, destroy, or delete any files, documents, electronically stored information, or other materials, whether or not embodying or recording any Confidential Information, including copies, without obtaining in advance the written consent of an authorized Company representative; and (b) she will promptly return to the Company all Confidential Information, documents, files, records and tapes, whether written in hardcopy form or electronically stored, that have been in her possession or control regarding the Company, and she will not use or disclose such materials in any way or in any format, including written information in any form, information stored by electronic means, and all copies of these materials. Employee further agrees that on or before the Separation Date, she will return to the Company immediately all Company property, including, without limitation, keys, equipment, computer(s) and computer equipment, devices, Company cellular phones, Company credit cards, data, electronically stored information, lists, correspondence, notes, memos, reports, or other writings prepared by the Company or herself on behalf of the Company without altering any such files or items (e.g., without wiping the cellular phone or computer) before returning them to the Company.

 

8. Authorized Use of Trade Secrets/ Confidential Information. Employee acknowledges and agrees that she is bound by Section 6 and Section 7 of the Agreement regardless of the reason for her separation from the Company or any of its Affiliates or any successor or assign. Notwithstanding the foregoing, Employee understands that Employee may disclose proprietary and/ or confidential information when required to do so by a court of competent jurisdiction, by any governmental agency having authority over Employee or the business of the Company or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order that Employee divulge, disclose or make accessible such information. The Company hereby notifies Employee in accordance with the Defend Trade Secrets Act of 2016 that Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Employee that if Employee files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Employee may disclose the Company’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

Nothing in this Release shall prohibit either party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the party.

 

Nothing in this Release shall prohibit any party or other person from the disclosure of any underlying facts or circumstances of any discrimination, harassment, or retaliation claim or from engaging in any actions protected by New York General Obligations Law § 5-336.

 

9. Knowing and Voluntary Release. Employee understands that it is her choice whether to enter into this Release and that her decision to do so is voluntary and is made knowingly.

 

10. No Prior Representations or Inducements. Employee represents and acknowledges that in executing this Release, she did not rely, has not relied, and expressly disavows reliance on any communications, statements, promises, inducements, or representation(s), oral or written, by any of the Released Parties, except as expressly contained in this Release.

 

11. Choice of Law. This Release shall, in all respects, be interpreted, enforced, and governed under the laws of the State of New York. The parties agree that the language of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for, or against, any of the parties.

 

12. Severability. The Company and Employee agree that should a court declare or determine that any provision of this Release is illegal or invalid, the validity of the remaining parts, terms or provisions of this Release will not be affected and any illegal or invalid part, term, or provision, will not be deemed to be a part of this Release.

 

13. Counterparts. The Company and Employee agree that this Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

 

Please read carefully as this document includes a release of claims, including a release of claims under the Age Discrimination in Employment Act (ADEA).

 

{Signature Page Follows}

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

IN WITNESS WHEREOF, the Company and Employee hereto evidence their agreement by their signatures.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
By:
Title:
EMPLOYEE:
Kara Jenny

 

Exhibit A

to Second Amended and Restated

Executive Employment Agreement

 

 

 

Exhibit 10.4

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is entered into on January 2, 2025 (the “Execution Date”), by and between Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”), and Adam Zalko (“Executive”).

 

RECITALS

 

Whereas, the Company and Executive (collectively the “Parties” and each individually a “Party”) desire to set forth in writing the terms and conditions of their agreement and understandings with respect to the employment of Executive; and

 

Whereas, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, for the period and upon the terms and conditions contained in this Agreement.

 

Now, Therefore, in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1. Incorporation of Recitals; Agreement to Employ. The above recitals are hereby incorporated into this Agreement as if fully set forth herein. The Parties desire to enter into this Agreement to, among other things, set forth the terms of Executive’s employment with the Company. The Parties acknowledge that this Agreement supersedes any other offer, agreement or promises made by anyone concerning any offer of employment by the Company, and this Agreement comprises the complete agreement between the Parties concerning Executive’s employment by the Company.

 

2. Term of Agreement. This Agreement shall be binding upon and enforceable against the Parties immediately when both Parties execute this Agreement. This Agreement’s stated term and the employment relationship created hereunder will begin on the Execution Date and will remain in effect for one (1) year, unless earlier terminated in accordance with Section 9 (the “Initial Employment Term”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each a “Renewal Term”), unless terminated by either Party upon written notice to the other Party given at least ninety (90) days before the end of the Initial Employment Term or any Renewal Term, as applicable, or unless earlier terminated in accordance with Section 9. The period during which Executive is employed under this Agreement (including the Initial Employment Term and any Renewal Term(s)) will be referred to as the “Employment Period.”

 

3. Surviving Agreement Provisions. Notwithstanding any provision of this Agreement to the contrary, the Parties’ respective rights and obligations under Sections 6 through 12 shall survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

 

4. Services to be Provided by Executive.

 

(a) Position and Responsibilities. Executive’s services hereunder will commence as of the Execution Date. Subject to this Agreement’s terms, Executive agrees to serve the Company as its Chief Operating Officer. Executive shall have the duties and privileges customarily associated with executives occupying the roles of Chief Operating Officer, and Executive shall perform all reasonable acts customarily associated with such roles, or necessary and/or desirable to protect and advance the best interests of the Company. Executive will report to the Company’s Chief Executive Officer. Executive agrees to devote substantially all his business time to the business of the Company (except as provided below).

 

 

(b) Executive’s Employment Representations. Executive agrees that he (i) shall not serve as a member of any board of directors, or as a trustee of, or in any manner be affiliated with, any present or future agency or organization (except for civic, religious, and not for profit organizations) without the prior written consent of the Company’s Board of Directors (the “Board”) (which consent will not be unreasonably withheld); (ii) will serve as an executive of the Company; and (iii) shall not, directly or indirectly, have any interest in, or perform any services for, any business competing with or similar in nature to the Company’s business as set forth in Section 7. Executive further represents to the Company that (A) he is not violating and will not violate any contractual, legal, or fiduciary obligations or burdens to which Executive is subject by entering into this Agreement or providing services under this Agreement’s terms; (B) Executive is under no contractual, legal, or fiduciary obligation or burden that he will allow to interfere with Executive’s ability to perform services under this Agreement’s terms; and (C) he has no bankruptcies, convictions, disputes with regulatory agencies, or other disclosable or disqualifying events that would impact the Company or its ability to conduct securities offerings. Notwithstanding anything to the contrary herein, nothing shall prevent or restrict Executive’s ownership of, serving as a board member or a trustee for, or providing services (in any capacity) to, any entity (or derivative thereof) for which he currently has an equity interest and provides such services, provided that such activities: (1) do not reasonably interfere with his provision of services to the Company and (2) such entities are not competing businesses with the Company as set forth in Section 7.

 

5. Compensation for Services. As compensation for the services Executive will perform under this Agreement, the Company will pay Executive during the Employment Period, and Executive shall accept as full compensation, the following:

 

(a) Base Salary. Executive shall receive an annualized base salary (“Base Salary”) of Two Hundred Sixty-Five Thousand Dollars (US $265,000), commencing as of the Execution Date (and retroactive to January 1, 2025), prorated for any partial years of employment with the Company. Commencing on January 1, 2026, provided that Executive is still employed in good standing with the Company, Executive shall receive an annualized Base Salary of Two Hundred Eighty Thousand Dollars (US $280,000), prorated for any partial years of employment with the Company. Additionally, the Board will review Executive’s Base Salary at least annually during the Employment Period, and, in the sole discretion of the Board, may increase (but not decrease) such Base Salary from time to time, but shall not be obligated to effectuate such an increase. Executive’s compensation shall be subject to all appropriate federal and state withholding taxes and shall be payable in accordance with the Company’s normal payroll procedures.

 

(b) Bonus Compensation. Annual incentive bonuses awarded to Executive for any calendar year during the Employment Period shall be determined by the Board, based on criteria to be established jointly by the Board and Executive and communicated to Executive in writing. Each such annual incentive bonus, if any, shall be payable during the annual review period (generally January or February) in the calendar year following the calendar year to which the annual incentive bonus relates, provided Executive is employed by the Company on such payment date. 

 

(c) Vacation. During the Employment Period, Executive shall be entitled to four (4) weeks paid vacation annually. Vacation shall be taken at such times and intervals as shall be determined by Executive, subject to the reasonable business needs of the Company. Upon the termination of Executive’s employment, for any reason, Executive will forfeit any accrued but unused vacation, resulting in no accrued, unused vacation being paid to Executive.

 

(d) Other Benefits and Perquisites. Executive shall be entitled to participate in the benefit plans provided by the Company for all employees generally and for the Company’s executive employees. The Company shall be entitled to change or terminate these plans in its sole discretion at any time. Any reimbursement of expenses made under this Agreement shall only be made for eligible expenses incurred during the Employment Period, and no reimbursement of any expense shall be made by the Company after December 31st of the year following the calendar year in which the expense was incurred. The amount eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and the right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit. Executive will comply with the Company’s policies regarding these benefits, including all Internal Revenue Service rules and requirements.

 

(e) Withholdings and Deductions. The compensation described in this Section 5 is subject to all legally required and authorized withholdings and deductions.

 

 

6. Confidential Information.

 

(a) Confidential Information. Executive acknowledges and agrees that during Executive’s engagement with the Company, whether as an owner, employee, or otherwise, the Company has provided and shall continue to provide Executive with confidential information and trade secrets of the Company (hereinafter referred to as “Confidential Information”) and shall place Executive in a position to develop and have ongoing access to Confidential Information of the Company, shall entrust Executive with business opportunities of the Company, and shall place, and has placed, Executive in a position to develop business goodwill on behalf of the Company. For purposes of this Agreement, all references to “the Company” include any predecessor thereto and Confidential Information includes, but is not limited to:

 

i.

Technologies developed by the Company and any research data or other documentation related to the development of such technologies, including all designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, developed or acquired by Executive, individually or in conjunction with others during the period of Executive’s engagement with the Company, whether as an owner, employee, or otherwise;

 

ii.

All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, logs, drawings, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression that are conceived, developed or acquired by Executive individually or in conjunction with others while Executive is employed or otherwise engaged by, or owns an ownership interest in, the Company (whether during business hours or otherwise and whether on any Company premises or otherwise) that relate to the Company’s business, trade secrets, products or services;

 

iii.

Customer lists and prospect lists developed by the Company or Executive;

 

iv.

Information regarding the Company’s customers which Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information, and other information regarding the customer’s business;

 

v.

Information related to the Company’s business, including but not limited to, marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

 

vi.

Training materials developed by and utilized by the Company; and

 

vii.

Any other information that Executive acquired as a result of Executive’s engagement with the Company, whether as an owner, employee, or otherwise, and which Executive has a reasonable basis to believe the Company would not want disclosed to a business competitor or to the general public, regardless of whether Executive received or had possession of the information before or after the Execution Date and including, without limitation, trade secrets.

 

Executive understands and acknowledges that such Confidential Information gives the Company a competitive advantage over others who do not have the information, and that the Company would be harmed if the Confidential Information were disclosed.

 

 

The Company hereby notifies Executive in accordance with the Defend Trade Secrets Act of 2016 that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Executive that if Executive files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Agreement shall prohibit either Party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the Party.

 

(b) Disclosure of Confidential Information. Executive agrees that he shall hold all Confidential Information in trust for the Company and shall not during or after his employment terminates for any reason: (i) use the information for any purpose other than the benefit of the Company; or (ii) disclose to any person or entity any Confidential Information of the Company except as necessary during Executive’s employment with the Company to perform services on behalf of the Company. Executive shall also take reasonable steps to safeguard such Confidential Information and to prevent its disclosure to unauthorized persons.

 

(c) Return of Information. Upon termination of employment, or at any earlier time as directed by the Company, Executive shall immediately deliver to the Company any and all Confidential Information in Executive’s possession, any other documents or information that Executive acquired as a result of his employment with the Company and any copies of any such documents/information. Executive shall not retain any originals or copies of any documents or materials related to the Company’s business, which Executive came into possession of or created as a result of his employment with the Company. Executive acknowledges that such information, documents and materials are the exclusive property of the Company. In addition, upon termination of employment, or at any time earlier as directed by the Company, Executive shall immediately deliver to the Company any property of the Company in Executive’s possession.

 

7. Restrictive Covenants. In consideration for the Company’s promise to provide Confidential Information to Executive, the substantial economic investment made by the Company in the Confidential Information, trade secrets and goodwill of the Company (including, without limitation, customer relationships), and the business opportunities disclosed or entrusted to Executive, the compensation and other benefits provided by the Company to Executive, and the Company’s employment of Executive pursuant to this Agreement, and to protect the Confidential Information, trade secrets and Company goodwill (including, without limitation, customer relationships), Executive agrees to enter into the following restrictive covenants.

 

(a) Non-Competition. Executive agrees that, during the Employment Period and during the Non-Competition Period (defined below), other than in connection with his duties under this Agreement, he shall not, without the prior written consent of the Board, directly or indirectly, either individually or as a principal, partner, stockholder, manager, agent, consultant, contractor, employee, lender, investor, or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, become employed by, control, carry on, join, lend money for, operate, engage in, establish, perform services for, invest in, solicit investors for, or consult for any person or entity engaged, or preparing to engage, in the Business (defined below) or any portion thereof within the Restricted Area (defined below). Notwithstanding the foregoing, Executive shall be permitted during the Employment Period to own, directly or indirectly, solely as an investment, securities of any organization or entity that are traded on any national securities exchange or the over-the-counter market if Executive is not the controlling shareholder or a member of a group that controls such organization or entity, and directly or indirectly, does not own three percent (3%) or more of any class of securities of such organization or entity.

 

For purposes of this Agreement, the following definitions shall apply:

 

i.

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

 

ii.

“Business” means the business in which the Company is actually engaged or has taken material steps to engage in as of the date Executive’s employment with the Company terminates for any reason.

 

 

iii.

“Company” means Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.) and any current or future Affiliates.

 

iv.

“Non-Competition Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

v.

“Non-Solicitation Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

vi.

“Person” shall have the meaning given in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). Person shall include more than one Person acting as a group as defined by the Treasury Regulations issued under Section 409A of the Code.

 

vii.

“Restricted Area” means, because the Company’s business is nationwide, Executive’s responsibilities are nationwide in scope, and Executive has access to the Confidential Information on a nationwide basis, all States comprising the United States, and any other geographic area in which the Company conducts business and for which Executive has responsibilities during Executive’s employment.

 

(b) Non-Solicitation. Executive agrees that, during the Employment Period and during the Non-Solicitation Period, other than in connection with his duties under this Agreement and for the benefit of the Company during the Employment Period, Executive shall not, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether personally or through other persons, (i) solicit business from, interfere with, attempt to solicit business with, or do business with any customer of the Company with whom the Company did business or who the Company solicited within the preceding two (2) years, and who or which: (A) Executive contacted, called on, serviced or did business with during Executive’s employment with the Company; (B) Executive learned of solely as a result of Executive’s employment with the Company; or (C) about whom Executive received Confidential Information; (ii) interfere with any relationship between the Company or any of its Affiliates and any supplier, provided that Executive has knowledge that such supplier is a supplier of the Company or any of its Affiliates; or (iii) solicit, induce or attempt to solicit or induce, engage or hire, on behalf of himself or any other person or entity, any person who is an employee or consultant of the Company or who was employed by the Company within the preceding twelve (12) months. The Parties acknowledge and agree that, for purposes of this Agreement, the term “customer” in this Section 7(b) does not include actual or potential consumers or users of the Company’s applications. The restriction in this Section 7(b) applies only to solicitation for, interference on behalf of, attempts to solicit business for, or doing business with a business that is competitive with any portion of the Business (as defined above) of the Company or any Affiliate thereof.

 

(c) Non-Disparagement. Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company and its Affiliates which were obtained through great costs, time and effort. Therefore, Executive agrees that during his employment and at all times after the termination of his employment for any reason, Executive shall not in any way, directly or indirectly, publicly disparage, libel or defame the Company, its beneficial owners or its Affiliates, or any of either the Company’s or any of its Affiliates’ respective businesses or business practices, products services, employees, or contractors.

 

(d) Tolling. If Executive violates any of the restrictions contained in Section 7(a) or Section 7(b), the Non-Competition Period and/or the Non-Solicitation Period, as applicable, shall be suspended and will not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation to the reasonable satisfaction of the Company.

 

 

(e) Remedies. Executive acknowledges that the restrictions contained in Sections 6 and 7 of this Agreement, in view of the nature of the Company’s business, trade secrets, the Confidential Information and business goodwill (including, without limitation, customer relationships) and his position with the Company, are reasonable and necessary to protect the Company’s legitimate business interests and that any violation of Sections 6 or 7 of this Agreement would result in irreparable injury to the Company. In the event of a breach by Executive of Sections 6 or 7 of this Agreement, then the Company shall be entitled to (i) a temporary restraining order and injunctive relief restraining Executive from the commission of any breach, and/or (ii) recover attorneys’ and witness fees, expenses and costs the Company incurs in such action. Further, if the Company prevails in any action brought by Executive (or anyone acting on his behalf) seeking to declare any term in Sections 6 or 7 void or unenforceable or subject to reduction or modification, then the Company shall be entitled to recover attorneys’ and witness fees, expenses and costs the Company incurs in such action.

 

(f) Reformation. The courts shall be entitled to modify the duration and scope of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as modified shall be enforceable. Executive acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the Company’s investment in its businesses, trade secrets, Confidential Information and the goodwill (including, without limitation, customer relationships) thereof. Executive acknowledges that the scope and duration of the restrictions contained herein are necessary and reasonable in light of the time that Executive has been engaged in the business of the Company, Executive’s reputation in the markets for the Company’s business and Executive’s relationship with the suppliers, customers and clients of the Company.

 

8. Trading Restrictions. Executive will be subject to trading and sales volume limitations in accordance with (a) applicable law, including Rule 144 under the Securities Act of 1933, as amended; and (b) such written insider trading policies as the Board may adopt and promulgate for Company employees generally.

 

9. Termination of Agreement. The employment relationship between Executive and the Company created under this Agreement and the Employment Period shall terminate upon the occurrence of any one of the following events:

 

(a) Death or Permanent Disability. Executive’s employment hereunder shall be terminated effective on the death or permanent disability of Executive. For this purpose, “permanent disability” shall mean that Executive, (i) in the opinion of a physician, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company, (iii) is determined to be totally disabled by the Social Security Administration, or (iv) is determined to be disabled in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the requirements of (i) or (ii) above.

 

(b) Termination for Cause. The Company shall have the option to terminate Executive’s employment, effective upon written notice of such termination to Executive, for Cause as the Company determines. Under this Agreement, termination for “Cause” means the Company’s termination of Executive’s employment upon the occurrence of any of the following events:

 

i.

Any act of fraud, misappropriation or embezzlement by Executive regarding any aspect of the Company’s or any of its Affiliates’ businesses;

 

ii.

The material breach by Executive of any Agreement provision and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

iii.

The conviction of Executive by a court of competent jurisdiction of a felony or a crime involving moral turpitude;

 

 

iv.

The intentional and material breach by Executive of any non-disclosure or non-competition/non-solicitation/non-interference provision of any agreement to which Executive and the Company or any of its current or future Affiliates are parties;

 

v.

The substantial failure by Executive to perform in all material respects his duties and responsibilities (other than as a result of death or permanent disability) and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

vi.

The failure or refusal of Executive to follow the lawful directives of the Board, which, if curable, Executive fails or refuses to cure within thirty (30) days after written demand is delivered;

 

vii.

Willful conduct by Executive that is materially injurious to the Company or any of its Affiliates;

 

viii.

Acceptance of employment with any employer other than the Company except upon written permission of the Board; or

 

ix.

The breach by Executive of any of his fiduciary duties to the Company.

 

Prior to any termination for Cause, the Company shall give Executive an opportunity to appear before the Board (with personal counsel, if Executive so chooses) in order to be heard on the matter. The Company shall provide Executive with a written notice of termination, which can be provided on the date of termination. In the event Executive’s employment is terminated for Cause under this Agreement, Executive shall be entitled to the compensation provided in Section 10(a) below.

 

(c) Termination by the Company without Cause. The Company may terminate Executive’s employment without Cause at any time upon thirty (30) days’ written notice to Executive, during which period Executive shall not be required to perform any services for the Company other than to assist the Company in training his successor and generally preparing for an orderly transition; provided, however, that Executive shall be entitled to compensation upon such termination as provided in Sections 10(a) and (b) below.

 

(d) Termination by Executive for Good Reason. Executive may terminate his employment at any time for Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the following without Executive’s prior written consent: (i) Executive’s being required to regularly report to a regular place of employment outside New York, New York; (ii) the Company’s material breach of any of the terms and conditions of this Agreement; or (iii) a detrimental and material change in Executive’s title, compensation, duties, or responsibilities; provided, however, that within ninety (90) days following Executive’s learning of such Good Reason, (A) the Company shall be given written notice of Executive’s intent to terminate his employment under this paragraph, and (B) the Company shall have thirty (30) days from receipt of such written notice to cure any such breach, requirement to regularly report, or change to the reasonable satisfaction of Executive. Upon such termination for Good Reason, Executive shall be entitled to compensation as provided in Sections 10(a) and (b) below.

 

(e) Termination by Executive Other Than for Good Reason. Executive may terminate his employment other than for Good Reason at any time upon forty-five (45) days’ written notice to the Company. Upon termination of this Agreement, the Company shall have no obligation to Executive other than as set forth in Section 10(a).

 

(f) Separation from Service. For purposes of this Agreement, including, without limitation, Sections 10 and 11, any references to a termination of Executive’s employment shall mean a “separation from service” as defined by Section 409A of the Code, and the Treasury Regulations and other guidance issued thereunder.

 

 

10. Compensation Upon Termination. Upon the termination of Executive’s employment under this Agreement before the expiration of the end of the stated term in this Agreement, Executive shall be entitled to the following:

 

(a) Compensation Upon Termination for Any Reason. Upon termination of Executive’s employment during the Employment Period before the expiration of the end of the stated term hereof for any reason or upon expiration of the stated term, Executive shall be entitled to the following within thirty (30) days of such termination:

 

i.

Accrued Base Salary. The Base Salary earned by him before the effective date of termination as provided in Section 5(a) that is unpaid (including salary payable during any applicable notice period), prorated on the basis of the number of full days of service rendered by Executive during the salary payment period to the effective date of termination; and

 

ii.

Unreimbursed Business Expenses; Company Benefit Plans. Any unreimbursed reasonable business expenses and any amounts to which Executive is entitled to under the Company’s benefit plans in accordance with their terms.

 

(b) Additional Compensation and Benefits Upon Non-Renewal by the Company or Upon Termination by the Company Without Cause or by Executive for Good Reason. If, at any time, (i) the Company elects not to renew this Agreement for any Renewal Term and Executive’s employment terminates as a result of such non-renewal, (ii) the Company terminates Executive’s employment without Cause (as defined in Section 9(b) above), or (iii) Executive terminates his employment for Good Reason (as defined in Section 9(d) above), then the Company shall, subject to Executive’s execution of a general release of claims in favor of the Company and subject to Executive’s compliance with Section 6 and Section 7, provide to Executive, in addition to the amounts set forth in Section 10(a) above, an amount equal to one (1) times the Executive’s then-current annualized Base Salary, less the amount of all compensation paid to Executive during the then-current term of this Agreement; provided, however, that in no event shall such payment equal less than four (4) months of the Executive’s then-current annualized Base Salary. Such payment shall be payable in equal installments over the balance of the then-current term of this Agreement, payable in accordance with the Company’s regularly scheduled payroll and commencing on the Company’s first regular payroll date that is five (5) days after the release of claims provided by Executive has become effective and binding upon Executive, provided, that, if the maximum forty-five (45) day consideration period and revocation period described in Section 10(d) spans two (2) tax years, then the payments shall commence in the second tax year. Additionally, if Executive is eligible and timely elects to continue his health insurance coverage pursuant to the COBRA statute, and subject to Executive’s execution of the release of claims referred to above, the Company will continue to pay its portion of Executive’s monthly health insurance premiums for the earlier of (A) the remainder of the then-current Term of this Agreement, or (B) the date Executive’s coverage under such group health plans terminates for any reason; provided that the Company’s payment of such premiums shall be limited to the same proportion of the cost of coverage under the Company’s group health plans as the Company pays on behalf of its employees generally (the “COBRA Entitlement”).

 

Executive shall have no obligation to mitigate any severance obligation of the Company under this Agreement by seeking new employment. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Agreement by the amount of earnings or benefits received by Executive in future employment.

 

Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of his employment, Executive’s rights and benefits under each of these plans, if any, shall be determined in accordance with the terms, conditions, and limitations of the plans and any separate agreement executed by Executive which may then be in effect.

 

(c) Penalty for Breach of Covenants. For any period of time that Executive is in breach of, or threatens to breach, Section 7, the Company shall not be obligated to pay any payments referenced in Section 10(b) of this Agreement, the Company’s payment obligations referenced in Section 10(b) of this Agreement shall terminate and expire, and the Company shall have no further obligations to Executive from and after the date of such breach or threatened breach. Additionally, the Company may recover any payments previously paid under Section 10(b) of this Agreement for the period of time that Executive was in breach of Section 7, save and except for $100, which $100 the Parties agree is sufficient consideration for the Waiver and Release of Claims referred to in Section 10(d). In addition, the Company shall have all other rights and remedies available under this Agreement, any other agreement, at law, or in equity.

 

 

(d) Release. Payment of any of the amounts described in this Section 10 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion of it during any applicable revocation period.

 

11. Reserved.

 

12. Other Provisions.

 

(a) Remedies; Legal Fees. Each of the Parties to this Agreement shall be entitled to enforce his or its rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in his or its favor. In any action resulting from a breach of this Agreement, the prevailing Party shall be entitled to recover his or its reasonable attorneys’ fees.

 

(b) Limitations on Assignment. In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute. Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the explicit written consent of the Company. Any attempted assignment by Executive in violation of this Section 12(b) shall be void. Except as provided in this Agreement, nothing in this Agreement entitles any person other than the Parties to this Agreement to any claim, cause of action, remedy, or right of any kind, including, without limitation, the right of continued employment; provided, however, that the Company may freely assign this Agreement, and/or any rights hereunder, to any Affiliate or to any other entity. Further, to the extent applicable, each Affiliate of the Company will be deemed a third-party beneficiary and may enforce the applicable rights and obligations under this Agreement. The Company’s assignees or successors are expressly authorized to enforce the Company’s rights and privileges hereunder, including without limitation the restrictive covenants set forth in Section 6 and Section 7.

 

(c) Severability and Reformation. The Parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 12(c).

 

(d) Notices. Any notice or other communication required, permitted or desired to be given under this Agreement shall be deemed delivered when personally delivered; the business day, if delivered by overnight courier; the same day, if transmitted by facsimile on a business day before noon, Eastern Standard Time; the next business day, if otherwise transmitted by facsimile; and the third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as addressed or transmitted as follows (or to such subsequent addresses as the Parties may give one another notice of):

 

If to Executive, at the last address for him on record with the Company. If to the Company:

 

Intelligent Protection Management Corp.

30 Jericho Executive Plaza

Suite 400E

Jericho, NY 11753

 

 

(e) Further Acts. Whether or not specifically required under the terms of this Agreement, each Party shall execute and deliver such documents and take such further actions as shall be necessary in order for such Party to perform all of his or its obligations specified in this Agreement or reasonably implied from this Agreement’s terms.

 

(f) Publicity and Advertising. Executive agrees that the Company may use his name, picture, or likeness for any advertising, publicity or other business purpose at any time, during the term of this Agreement and may continue to use materials generated during the term of this Agreement for a period of six (6) months thereafter. The use of Executive’s name, picture, or likeness shall not be deemed to result in any invasion of Executive’s privacy or in violation of any property right Executive may have; and Executive shall receive no additional consideration if his name, picture or likeness is so used. Executive further agrees that any negatives, prints or other material for printing or reproduction purposes prepared in connection with the use of his name, picture or likeness by the Company shall be and are the sole property of the Company.

 

(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.

 

(h) Venue. The exclusive venue for all suits or proceedings arising from or related to this Agreement shall be in a court of competent jurisdiction in Nassau County, New York.

 

(i) Waiver. A Party’s waiver of any breach or violation of any Agreement provisions shall not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement provision.

 

(j) Entire Agreement, Amendment, Binding Effect. This Agreement constitutes the entire agreement between the Parties concerning the subject matter in this Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Executive acknowledges and represents that in executing this Agreement, he did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. Any amendment to this Agreement must be signed by all Parties to this Agreement. This Agreement will be binding on and inure to the benefit of the Parties hereto and their respective successors, heirs, legal representatives, and permitted assigns (if any). This Agreement supersedes any prior agreements between Executive and the Company concerning the subject matter of this Agreement.

 

(k) Counterparts. This Agreement may be executed in counterparts, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

(l) Directors and Officers Insurance/Indemnification. During the Employment Period, the Company shall maintain Executive as an insured party on directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers. Either through its directors and officers insurance policy and pursuant to the terms thereof or, if such insurance is not available, otherwise, the Company will indemnify and hold Executive harmless against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or proceeding to which Executive is a party, or threat thereof, by reason of his being or having been an officer or director of the Company or any Affiliate, to the extent permitted by applicable law; provided, however, that this indemnity shall not apply if Executive is determined by a court of competent jurisdiction (whether it be through a determination issued in a jury trial, arbitration, administrative hearing or trial, or bench trial) to have acted against the interests of the Company with gross negligence, gross misconduct, or gross malfeasance. If such a determination is entered, Executive shall reimburse Company for all amounts Company or its insurer paid under this Section 12(l) concerning such matter or related matters within thirty (30) days of the entry of such determination. Promptly after receipt by Executive of notice of the commencement of any action (including any governmental action) or threat thereof, Executive shall, if a claim covered by this Section 12(l) is to be made or is threatened against Executive, deliver to the Company a written notice of the commencement or threat thereof, and the Company shall have the right to participate in, and, to the extent, the Company so desires to assume the defense thereof with counsel selected by the Company and approved by Executive (whose approval shall not be unreasonably withheld); provided, however, that Executive (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Company, if, and only if, representation of Executive by the counsel retained by the Company would be inappropriate due to actual or potential differing interests between Executive and any other party represented by such counsel in such proceeding. Executive’s failure to deliver written notice to the Company within a reasonable time of the commencement or threat of any action for which Executive seeks indemnification under this Section 12(1), if prejudicial to the Company’s ability to defend such action, shall relieve the Company of any liability to Executive under this Agreement.

 

 

13. Section 409A of the Code

 

(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (ii) Executive is deemed at the time of his separation from service to be a “specified employee” under Section 409A of the Code; and (iii) at the time of Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of Executive’s separation from service) shall not be made until the earlier of (A) the first day of the seventh month following Executive’s separation from service or (B) the date of Executive’s death following such separation from service. During any period that payment or payments to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per annum rate equal to the highest rate of interest applicable to six (6) month money market accounts offered by the following institutions: Citibank N.A., Wells Fargo Bank, NA., or Bank of America, on the date of such “separation from service.” Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 13 (together with accrued interest thereon) shall be paid to Executive or Executive’s beneficiary in one lump sum.

 

(b) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Executive to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions. 

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first indicated above.

 

THE COMPANY:

 

INTELLIGENT PROTECTION MANAGEMENT CORP.

 

/s/ John Silberstein
By:	John Silberstein
Title:	Chairman of the Compensation Committee of the Board of Directors
EXECUTIVE:
/s/ Adam Zalko
Adam Zalko

 

Signature Page

to Executive Employment Agreement

 

  

EXHIBIT A

 

WAIVER AND RELEASE OF CLAIMS

 

This Waiver and Release of Claims (“Release”), effective as of the ______________ (the “Effective Date”), is made and entered into by and between Adam Zalko (“Employee”) and Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”). Terms used in this Release with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Executive Employment Agreement made and entered into as of January 2, 2025 by and between the Company and Employee (the “Agreement”).

 

WHEREAS, Employee and the Company are parties to the Agreement; and

 

WHEREAS, Section 10 of the Agreement provides that Employee is entitled to certain payments and benefits upon separation from employment under certain circumstances specified in the Agreement if he signs a release agreement.

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and adequacy of which are acknowledged, Employee and the Company agree as follows:

 

1. Global Release. In consideration of the mutual promises contained in the Agreement, including the Company’s promises to pay Employee consideration under Section 10 of the Agreement, which are in addition to anything of value to which Employee is already entitled, Employee, on behalf of himself, his heirs, executors, successors and assigns, irrevocably and unconditionally releases, waives, and forever discharges the Company and all of either of their predecessors and all of their respective parents, divisions, subsidiaries, affiliates, joint venture partners, partners, and related companies, and their present and former agents, employees, officers, directors, attorneys, stockholders, plan fiduciaries, successors and assigns, including, without limitation, _________________________________ (collectively, the “Released Parties”), from any and all claims, demands, actions, causes of action, costs, fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which Employee has, had, or may have against the Released Parties relating to or arising out of his employment or any terms of the Agreement from the Effective Date and up to and including the date Employee signs this Release. This Release includes, without limitation, claims at law or equity or sounding in contract (express or implied) or tort, claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, creed, disability, religion, military status, family status, marital status, partnership status, domestic violence, stalking and sex offense victim status, arrest and conviction record, predisposing genetic characteristic, alienage or citizenship status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including, without limitation, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the ADA Amendments Act of 2008, Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, the Civil Rights Acts of 1866 and/or 1871, 42 U.S.C. Section 1981, the Rehabilitation Act, the Family and Medical Leave Act, the Fair Labor Standards Act anti-retaliation provisions, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Lilly Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, the New York Labor Law, the New York State Civil Rights Law, the New York Workers’ Compensation Law, and the New York City Human Rights Law, all as amended and including all of their respective implementing regulations, any federal, state, local or municipal whistleblower protection or anti-retaliation statute or ordinance, or any other federal, state, local, or municipal laws of any jurisdiction), claims arising under the Employee Retirement Income Security Act (except any employee benefits or employee participation rights as contained in the Agreement), or any other statutory or common law claims related to or arising out of his employment or any terms of the Agreement, from the Effective Date and up to and including the date of this Release’s execution by Employee. Notwithstanding the foregoing, nothing in this Release shall affect or impair: (a) any rights Employee may have to indemnification, including without limitation indemnification for attorneys’ fees, costs and/or expenses, pursuant to applicable statute, certificates of incorporation and by-laws of the Company or any of its Affiliates; (b) any of Employee’s rights arising under the Agreement stated in Section 12 or the applicable section of Section 10; (c) any rights that Employee has as a former employee under the Company’s employee benefit plans (other than any severance plan); or (d) any rights Employee may have that cannot be waived as a matter of law.

 

Exhibit A

to Executive Employment Agreement

 

 

2. No Admission of Liability. Employee understands and agrees that this Release shall not in any way be construed as an admission by the Released Parties of any unlawful or wrongful acts whatsoever against Employee or any other person. The Released Parties specifically disclaim any liability to or wrongful acts against Employee or any other person.

 

3. Time to Consider Release. Employee is hereby advised in writing by the Company that he should consult an attorney before executing this Release. Employee has a period of up to [twenty-one (21)/forty-five (45)] calendar days after receiving the Release within which to review and consider the provisions of this Release. Employee understands that if he does not sign this Release before the [twenty-one (21)/forty-five (45)] calendar day period expires, this Release offer will be withdrawn automatically.

 

[Additional information may be inserted if Employee’s employment ends as part of a layoff.]

 

4. Revocation Period. Employee understands and acknowledges that he has seven (7) calendar days following the execution of this Release to revoke his acceptance of this Release. This Release will not become effective or enforceable, and the payments and benefits described under Section 10 of the Agreement will not become payable, until after this revocation period has expired without his revocation. If Employee does not revoke the Release within the revocation period, the Company will commence the payments and benefits described under Section 10 of the Agreement as stated in Section 10(b) of the Agreement.

 

5. Confidentiality of Release and Company Information. Employee agrees to keep this Release, its terms, and the amount of payments and benefits related to this Release completely confidential. Employee agrees and understands that he is prohibited from disclosing any terms of this Release to anyone, except that he may disclose the terms of this Release and the amount of the payments and benefits related to this Release to his spouse, attorneys, accountants, and financial advisors or as otherwise required by law. Employee also agrees to continue to abide by the confidentiality provisions of the Agreement.

 

6. Non-Disparagement and Other Continuing Obligations. Employee agrees to continue to abide by Section 6 (“Confidential Information”) and Section 7 (“Restrictive Covenants”) of the Agreement and any other surviving obligations of Employee as set forth in the Agreement, including, without limitation, Section 3 therein.

 

7. Agreement to Return Company Property/Documents. Employee understands and agrees that his last day of active work in any Company office or on any Company owned or leased property will be __________________, 20__ (the “Separation Date”). Accordingly, Employee agrees that: (a) he will not take with him, copy, alter, destroy, or delete any files, documents, electronically stored information, or other materials, whether or not embodying or recording any Confidential Information, including copies, without obtaining in advance the written consent of an authorized Company representative; and (b) he will promptly return to the Company all Confidential Information, documents, files, records and tapes, whether written in hardcopy form or electronically stored, that have been in his possession or control regarding the Company, and he will not use or disclose such materials in any way or in any format, including written information in any form, information stored by electronic means, and all copies of these materials. Employee further agrees that on or before the Separation Date, he will return to the Company immediately all Company property, including, without limitation, keys, equipment, computer(s) and computer equipment, devices, Company cellular phones, Company credit cards, data, electronically stored information, lists, correspondence, notes, memos, reports, or other writings prepared by the Company or himself on behalf of the Company without altering any such files or items (e.g., without wiping the cellular phone or computer) before returning them to the Company.

 

Exhibit A

to Executive Employment Agreement

 

 

8. Authorized Use of Trade Secrets/ Confidential Information. Employee acknowledges and agrees that he is bound by Section 6 and Section 7 of the Agreement regardless of the reason for his separation from the Company or any of its Affiliates or any successor or assign. Notwithstanding the foregoing, Employee understands that Employee may disclose proprietary and/ or confidential information when required to do so by a court of competent jurisdiction, by any governmental agency having authority over Employee or the business of the Company or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order that Employee divulge, disclose or make accessible such information. The Company hereby notifies Employee in accordance with the Defend Trade Secrets Act of 2016 that Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Employee that if Employee files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Employee may disclose the Company’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Release shall prohibit either party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the party.

 

Nothing in this Release shall prohibit any party or other person from the disclosure of any underlying facts or circumstances of any discrimination, harassment, or retaliation claim or from engaging in any actions protected by New York General Obligations Law § 5-336.

 

9. Knowing and Voluntary Release. Employee understands that it is his choice whether to enter into this Release and that his decision to do so is voluntary and is made knowingly.

 

10. No Prior Representations or Inducements. Employee represents and acknowledges that in executing this Release, he did not rely, has not relied, and expressly disavows reliance on any communications, statements, promises, inducements, or representation(s), oral or written, by any of the Released Parties, except as expressly contained in this Release.

 

11. Choice of Law. This Release shall, in all respects, be interpreted, enforced, and governed under the laws of the State of New York. The parties agree that the language of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for, or against, any of the parties.

 

12. Severability. The Company and Employee agree that should a court declare or determine that any provision of this Release is illegal or invalid, the validity of the remaining parts, terms or provisions of this Release will not be affected and any illegal or invalid part, term, or provision, will not be deemed to be a part of this Release.

 

13. Counterparts. The Company and Employee agree that this Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

 

Please read carefully as this document includes a release of claims, including a release of claims under the
Age Discrimination in Employment Act (ADEA).

 

{Signature Page Follows}

 

Exhibit A

to Executive Employment Agreement

 

 

IN WITNESS WHEREOF, the Company and Employee hereto evidence their agreement by their signatures.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
By:
Title:
EMPLOYEE:
Adam Zalko

 

Exhibit A

to Executive Employment Agreement 

 

 

 

Exhibit 10.5

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is entered into on January 2, 2025 (the “Execution Date”), by and between Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation, located at 30 Jericho Executive Plaza, Suite 400E, Jericho, New York 11753 (the “Company”), and Jared Mills, an individual residing in the State of Arizona (“Executive”).

 

RECITALS

 

Whereas, the Company and Executive (collectively the “Parties” and each individually a “Party”) desire to set forth in writing the terms and conditions of their agreement and understandings with respect to the employment of Executive with the Company; and

 

Whereas, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, for the period and upon the terms and conditions contained in this Agreement.

 

Now, Therefore, in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

1. Incorporation of Recitals; Agreement to Employ. The above recitals are hereby incorporated into this Agreement as if fully set forth herein. The Parties desire to enter into this Agreement to, among other things, set forth the terms of Executive’s employment with the Company. The Parties acknowledge that this Agreement supersedes any other offer, agreement or promises made by anyone concerning any offer of employment by the Company, and this Agreement comprises the complete agreement between the Parties concerning Executive’s employment by the Company.

 

2. Term of Agreement. This Agreement shall be binding upon and enforceable against the Parties immediately when both Parties execute this Agreement. This Agreement’s stated term and the employment relationship created hereunder will begin on the Execution Date and will remain in effect for one (1) year, unless earlier terminated in accordance with Section 9 (the “Initial Employment Term”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each a “Renewal Term”), unless terminated by either Party upon written notice to the other Party given at least ninety (90) days before the end of the Initial Employment Term or any Renewal Term, as applicable, or unless earlier terminated in accordance with Section 9. The period during which Executive is employed under this Agreement (including the Initial Employment Term and any Renewal Term(s)) will be referred to as the “Employment Period.”

 

3. Surviving Agreement Provisions. Notwithstanding any provision of this Agreement to the contrary, the Parties’ respective rights and obligations under Sections 6 through 12 shall survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

 

4. Services to be Provided by Executive.

 

(a) Position and Responsibilities. Executive’s services hereunder will commence as of the Execution Date. Subject to this Agreement’s terms, Executive agrees to serve the Company as its President. Executive shall have the duties and privileges customarily associated with executives occupying the roles of President, including, without limitation, supervising all of the Company’s technology employees, designing and implementing the Company’s web hosting, cloud hosting and cybersecurity solutions and acquiring new customers, and Executive shall perform all reasonable acts customarily associated with such roles, or necessary and/or desirable to protect and advance the best interests of the Company. Executive will report to the Company’s Chief Executive Officer. Executive agrees to devote substantially all his business time to the business of the Company (except as provided below).

 

 

(b) Executive’s Employment Representations. Executive agrees that he (i) shall not serve as a member of any board of directors, or as a trustee of, or in any manner be affiliated with, any present or future agency or organization (except for civic, religious, and not for profit organizations) without the prior written consent of the Company’s Board of Directors (the “Board”) (which consent will not be unreasonably withheld); (ii) will serve as an executive of the Company; and (iii) shall not, directly or indirectly, have any interest in, or perform any services for, any business competing with or similar in nature to the Company’s business as set forth in Section 7. Executive further represents to the Company that (A) he is not violating and will not violate any contractual, legal, or fiduciary obligations or burdens to which Executive is subject by entering into this Agreement or providing services under this Agreement’s terms; (B) Executive is under no contractual, legal, or fiduciary obligation or burden that he will allow to interfere with Executive’s ability to perform services under this Agreement’s terms; and (C) he has no bankruptcies, convictions, disputes with regulatory agencies, or other disclosable or disqualifying events that would impact the Company or its ability to conduct securities offerings. Notwithstanding anything to the contrary herein, nothing shall prevent or restrict Executive’s ownership of, serving as a board member or a trustee for, or providing services (in any capacity) to, any entity (or derivative thereof) for which he currently has an equity interest and provides such services, provided that such activities: (1) do not reasonably interfere with his provision of services to the Company and (2) such entities are not competing businesses with the Company as set forth in Section 7.

 

5. Compensation for Services. As compensation for the services Executive will perform under this Agreement, the Company will pay Executive during the Employment Period, and Executive shall accept as full compensation, the following:

 

(a) Base Salary. Executive shall receive an annualized base salary (“Base Salary”) of Three Hundred Twenty-Five Thousand Dollars (US $325,000), commencing as of the Execution Date, prorated for any partial years of employment with the Company. Additionally, the Board will review Executive’s Base Salary at least annually during the Employment Period, and, in the sole discretion of the Board, may increase (but not decrease) such Base Salary from time to time, but shall not be obligated to effectuate such an increase. Executive’s compensation shall be subject to all appropriate federal and state withholding taxes and shall be payable in accordance with the Company’s normal payroll procedures.

 

(b) Bonus Compensation. Annual incentive bonuses awarded to Executive for any calendar year during the Employment Period shall be determined by the Board, based on criteria to be established jointly by the Board and Executive and communicated to Executive in writing. Each such annual incentive bonus, if any, shall be payable during the annual review period (generally January or February) in the calendar year following the calendar year to which the annual incentive bonus relates, provided Executive is employed by the Company on such payment date. 

 

(c) Vacation. During the Employment Period, Executive shall be entitled to four (4) weeks paid vacation annually. Vacation shall be taken at such times and intervals as shall be determined by Executive, subject to the reasonable business needs of the Company. Upon the termination of Executive’s employment, for any reason, Executive will forfeit any accrued but unused vacation, resulting in no accrued, unused vacation being paid to Executive.

 

(d) Other Benefits and Perquisites. Executive shall be entitled to participate in the benefit plans provided by the Company for all employees generally and for the Company’s executive employees. The Company shall be entitled to change or terminate these plans in its sole discretion at any time. Any reimbursement of expenses made under this Agreement shall only be made for eligible expenses incurred during the Employment Period, and no reimbursement of any expense shall be made by the Company after December 31st of the year following the calendar year in which the expense was incurred. The amount eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and the right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit. Executive will comply with the Company’s policies regarding these benefits, including all Internal Revenue Service rules and requirements.

 

(e) Withholdings and Deductions. The compensation described in this Section 5 is subject to all legally required and authorized withholdings and deductions.

 

 

6. Confidential Information.

 

(a) Confidential Information. Executive acknowledges and agrees that during Executive’s engagement with the Company, whether as an owner, employee, or otherwise, the Company has provided and shall continue to provide Executive with confidential information and trade secrets of the Company (hereinafter referred to as “Confidential Information”) and shall place Executive in a position to develop and have ongoing access to Confidential Information of the Company, shall entrust Executive with business opportunities of the Company, and shall place, and has placed, Executive in a position to develop business goodwill on behalf of the Company. For purposes of this Agreement, all references to “the Company” include Newtek Technology Solutions, Inc. (“NTS”), and Confidential Information includes, but is not limited to:

 

i.

Technologies developed by the Company and any research data or other documentation related to the development of such technologies, including all designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, developed or acquired by Executive, individually or in conjunction with others during the period of Executive’s engagement with the Company, whether as an owner, employee, or otherwise;

 

ii.

All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, logs, drawings, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression that are conceived, developed or acquired by Executive individually or in conjunction with others while the Company was contemplating hiring Executive or Executive is employed, or otherwise engaged by, or owns an ownership interest in, NTS or the Company (whether during business hours or otherwise and whether on any Company premises or otherwise) that relate to the Company’s business, trade secrets, products or services;

 

iii.

Customer lists and prospect lists developed by the Company or Executive;

 

iv.

Information regarding the Company’s customers which Executive acquired as a result of Executive’s engagement with the Company or NTS, whether as an owner, employee, or otherwise, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information, and other information regarding the customer’s business;

 

v.

Information related to the Company’s business, including but not limited to, marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

 

vi.

Training materials developed by and utilized by the Company; and

 

vii.

Any other information that Executive acquired as a result of Executive’s engagement with the Company or NTS, whether as an owner, employee, or otherwise, and which Executive has a reasonable basis to believe the Company would not want disclosed to a business competitor or to the general public, regardless of whether Executive received or had possession of the information before or after the Execution Date and including, without limitation, trade secrets.

 

Confidential Information does not include information that is available to the general public through no violation of this Agreement or any other confidentiality obligation to the Company.

 

Executive understands and acknowledges that such Confidential Information gives the Company a competitive advantage over others who do not have the information, and that the Company would be harmed if the Confidential Information were disclosed.

 

 

The Company hereby notifies Executive in accordance with the Defend Trade Secrets Act of 2016 that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Executive that if Executive files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (y) files any document containing the trade secret under seal; and (z) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Agreement shall prohibit either Party from responding to a peace officer’s or a prosecutor’s inquiry or making a statement not initiated by that Party in a criminal proceeding as is prohibited by Ariz. Rev. Stat. § 12-720.

 

Nothing in this Agreement shall prohibit either Party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the Party.

 

(b) Disclosure of Confidential Information. Executive agrees that he shall hold all Confidential Information in trust for the Company and shall not during or after his employment terminates for any reason: (i) use the information for any purpose other than the benefit of the Company; or (ii) disclose to any person or entity any Confidential Information of the Company except as necessary during Executive’s employment with the Company to perform services on behalf of the Company. Executive shall also take reasonable steps to safeguard such Confidential Information and to prevent its disclosure to unauthorized persons.

 

(c) Return of Information. Upon termination of employment, or at any earlier time as directed by the Company, Executive shall immediately deliver to the Company any and all Confidential Information in Executive’s possession, any other documents or information that Executive acquired as a result of his employment with the Company and any copies of any such documents/information. Executive shall not retain any originals or copies of any documents or materials related to the Company’s business, which Executive came into possession of or created as a result of his employment with the Company. Executive acknowledges that such information, documents and materials are the exclusive property of the Company. In addition, upon termination of employment, or at any time earlier as directed by the Company, Executive shall immediately deliver to the Company any property of the Company in Executive’s possession.

 

7. Restrictive Covenants. In consideration for the Company’s promise to provide Confidential Information to Executive, the substantial economic investment made by the Company in the Confidential Information, trade secrets and goodwill of the Company (including, without limitation, customer relationships), and the business opportunities disclosed or entrusted to Executive, the compensation and other benefits provided by the Company to Executive, and the Company’s employment of Executive pursuant to this Agreement, and to protect the Confidential Information, trade secrets and Company goodwill (including, without limitation, customer relationships), Executive agrees to enter into the following restrictive covenants.

 

(a) Non-Competition. Executive agrees that, during the Employment Period and during the Non-Competition Period (defined below), other than in connection with his duties under this Agreement, he shall not, without the prior written consent of the Board, directly or indirectly, either individually or as a principal, partner, stockholder, manager, agent, consultant, contractor, employee, lender, investor, or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, become employed by, control, carry on, join, lend money for, operate, engage in, establish, perform services for, invest in, solicit investors for, or consult for any person or entity engaged, or preparing to engage, in the Business (defined below) or any portion thereof within the Restricted Area (defined below). Notwithstanding the foregoing, Executive shall be permitted during the Employment Period to own, directly or indirectly, solely as an investment, securities of any organization or entity that are traded on any national securities exchange or the over-the-counter market if Executive is not the controlling shareholder or a member of a group that controls such organization or entity, and directly or indirectly, does not own three percent (3%) or more of any class of securities of such organization or entity.

 

For purposes of this Agreement, the following definitions shall apply:

 

i.

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

 

 

ii.

“Business” means the business in which the Company is actually engaged or has taken material steps to engage in as of the date Executive’s employment with the Company terminates for any reason.

 

iii.

“Company” means Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.) and any current or future Affiliates.

 

iv.

“Non-Competition Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

v.

“Non-Solicitation Period” means: (i) a period of twenty-four (24) months immediately following the date of Executive’s termination from employment for any reason; and (ii) a period of twelve (12) months immediately following the date of Executive’s termination from employment for any reason.

 

vi.

“Person” shall have the meaning given in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). Person shall include more than one Person acting as a group as defined by the Treasury Regulations issued under Section 409A of the Code.

 

vii.

“Restricted Area” means, because the Company’s business is nationwide, Executive’s responsibilities are nationwide in scope, and Executive has access to the Confidential Information on a nationwide basis, all States comprising the United States, and any other geographic area in which the Company conducts business and for which Executive has responsibilities during Executive’s employment.

 

(b) Non-Solicitation. Executive agrees that, during the Employment Period and during the Non-Solicitation Period, other than in connection with his duties under this Agreement and for the benefit of the Company during the Employment Period, Executive shall not, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether personally or through other persons, (i) solicit business from, interfere with, attempt to solicit business with, or do business with any customer of the Company with whom the Company did business within the preceding two (2) years, and who or which: (A) Executive contacted, called on, serviced or did business with during Executive’s employment with the Company or NTS; (B) Executive learned of solely as a result of Executive’s employment with the Company or NTS; or (C) about whom Executive received Confidential Information; (ii) interfere with any relationship between the Company or any of its Affiliates and any supplier, provided that Executive has knowledge that such supplier is a supplier of the Company or any of its Affiliates; or (iii) solicit, induce or attempt to solicit or induce, engage or hire, on behalf of himself or any other person or entity, any person who is an employee or consultant of the Company or who was employed by the Company within the preceding twelve (12) months. The Parties acknowledge and agree that, for purposes of this Agreement, the term “customer” in this Section 7(b) does not include actual or potential consumers or users of the Company’s applications. The restriction in this Section 7(b) applies only to solicitation for, interference on behalf of, attempts to solicit business for, or doing business with a business that is competitive with any portion of the Business (as defined above) of the Company or any Affiliate thereof.

 

(c) Non-Disparagement. Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company and its Affiliates which were obtained through great costs, time and effort. Therefore, Executive agrees that during his employment and at all times after the termination of his employment for any reason, Executive shall not in any way, directly or indirectly, publicly disparage, libel or defame the Company, its beneficial owners or its Affiliates, or any of either the Company’s or any of its Affiliates’ respective businesses or business practices, products services, employees, or contractors.

 

 

(d) Tolling. If Executive violates any of the restrictions contained in Section 7(a) or Section 7(b), the Non-Competition Period and/or the Non-Solicitation Period, as applicable, shall be suspended and will not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation to the reasonable satisfaction of the Company.

 

(e) Remedies. Executive acknowledges that the restrictions contained in Sections 6 and 7 of this Agreement, in view of the nature of the Company’s business, trade secrets, the Confidential Information and business goodwill (including, without limitation, customer relationships) and his position with the Company, are reasonable and necessary to protect the Company’s legitimate business interests and that any violation of Sections 6 or 7 of this Agreement would result in irreparable injury to the Company. In the event of a breach by Executive of Sections 6 or 7 of this Agreement, then the Company shall be entitled to (i) a temporary restraining order and injunctive relief restraining Executive from the commission of any breach, and/or (ii) recover attorneys’ and witness fees, expenses and costs the Company incurs in such action. Further, if the Company prevails in any action brought by Executive (or anyone acting on his behalf) seeking to declare any term in Sections 6 or 7 void or unenforceable or subject to reduction or modification, then the Company shall be entitled to recover attorneys’ and witness fees, expenses and costs the Company incurs in such action.

 

(f) Reformation. The courts shall be entitled to modify the duration and scope of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as modified shall be enforceable. Executive acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the Company’s investment in its businesses, trade secrets, Confidential Information and the goodwill (including, without limitation, customer relationships) thereof. Executive acknowledges that the scope and duration of the restrictions contained herein are necessary and reasonable in light of the time that Executive has been engaged in the business of the Company and NTS, Executive’s reputation in the markets for the Company’s business and Executive’s relationship with the suppliers, customers and clients of the Company.

 

8. Trading Restrictions. Executive will be subject to trading and sales volume limitations in accordance with (a) applicable law, including Rule 144 under the Securities Act of 1933, as amended; and (b) such written insider trading policies as the Board may adopt and promulgate for Company employees generally.

 

9. Termination of Agreement. The employment relationship between Executive and the Company created under this Agreement and the Employment Period shall terminate upon the occurrence of any one of the following events:

 

(a) Death or Permanent Disability. Executive’s employment hereunder shall be terminated effective on the death or permanent disability of Executive. For this purpose, “permanent disability” shall mean that Executive, (i) in the opinion of a physician, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company, (iii) is determined to be totally disabled by the Social Security Administration, or (iv) is determined to be disabled in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the requirements of (i) or (ii) above.

 

 

(b) Termination for Cause. The Company shall have the option to terminate Executive’s employment, effective upon written notice of such termination to Executive, for Cause as the Company determines. Under this Agreement, termination for “Cause” means the Company’s termination of Executive’s employment upon the occurrence of any of the following events:

 

i.

Any act of fraud, misappropriation or embezzlement by Executive regarding any aspect of the Company’s or any of its Affiliates’ businesses;

 

ii.

The material breach by Executive of any Agreement provision and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

iii.

The conviction of Executive by a court of competent jurisdiction of a felony or a crime involving moral turpitude;

 

iv.

The intentional and material breach by Executive of any non-disclosure or non-competition/non-solicitation/non-interference provision of any agreement to which Executive and the Company or any of its current or future Affiliates are parties;

 

v.

The substantial failure by Executive to perform in all material respects his duties and responsibilities (other than as a result of death or permanent disability) and the failure of Executive to cure the same in all material respects within thirty (30) days after written notice thereof from the Board;

 

vi.

The failure or refusal of Executive to follow the lawful directives of the Board, which, if curable, Executive fails or refuses to cure within thirty (30) days after written demand is delivered;

 

vii.

Willful conduct by Executive that is materially injurious to the Company or any of its Affiliates;

 

viii.

Acceptance of employment with any employer other than the Company except upon written permission of the Board; or

 

ix.

The breach by Executive of any of his fiduciary duties to the Company.

 

Prior to any termination for Cause, the Company shall give Executive an opportunity to appear before the Board (with personal counsel, if Executive so chooses) in order to be heard on the matter. The Company shall provide Executive with a written notice of termination, which can be provided on the date of termination. In the event Executive’s employment is terminated for Cause under this Agreement, Executive shall be entitled to the compensation provided in Section 10(a) below.

 

(c) Termination by the Company without Cause. The Company may terminate Executive’s employment without Cause at any time upon thirty (30) days’ written notice to Executive, during which period Executive shall not be required to perform any services for the Company other than to assist the Company in training his successor and generally preparing for an orderly transition; provided, however, that Executive shall be entitled to compensation upon such termination as provided in Sections 10(a) and (b) below.

 

(d) Termination by Executive for Good Reason. Executive may terminate his employment at any time for Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the following without Executive’s prior written consent: (i) Executive’s being required to regularly report to a regular place of employment outside Arizona, provided that business travel as required by the Company or to properly perform Executive’s job duties, including, without limitation, business travel to New York, shall not be considered “required to regularly report to a regular place of employment outside Arizona;” (ii) the Company’s material breach of any of the terms and conditions of this Agreement; or (iii) a detrimental and material change in Executive’s title, compensation, duties, or responsibilities; provided, however, that within ninety (90) days following Executive’s learning of such Good Reason, (A) the Company shall be given written notice of Executive’s intent to terminate his employment under this paragraph, and (B) the Company shall have thirty (30) days from receipt of such written notice to cure any such breach, requirement to regularly report, or change to the reasonable satisfaction of Executive. Upon such termination for Good Reason, Executive shall be entitled to compensation as provided in Sections 10(a) and (b) below.

 

(e) Termination by Executive Other Than for Good Reason. Executive may terminate his employment other than for Good Reason at any time upon forty-five (45) days’ written notice to the Company. Upon termination of this Agreement, the Company shall have no obligation to Executive other than as set forth in Section 10(a).

 

(f) Separation from Service. For purposes of this Agreement, including, without limitation, Sections 10 and 11, any references to a termination of Executive’s employment shall mean a “separation from service” as defined by Section 409A of the Code, and the Treasury Regulations and other guidance issued thereunder.

 

 

10. Compensation Upon Termination. Upon the termination of Executive’s employment under this Agreement before the expiration of the end of the stated term in this Agreement, Executive shall be entitled to the following:

 

(a) Compensation Upon Termination for Any Reason. Upon termination of Executive’s employment during the Employment Period before the expiration of the end of the stated term hereof for any reason or upon expiration of the stated term, Executive shall be entitled to the following within thirty (30) days of such termination:

 

i.

Accrued Base Salary. The Base Salary earned by him before the effective date of termination as provided in Section 5(a) that is unpaid (including salary payable during any applicable notice period), prorated on the basis of the number of full days of service rendered by Executive during the salary payment period to the effective date of termination; and

 

ii.

Unreimbursed Business Expenses; Company Benefit Plans. Any unreimbursed reasonable business expenses and any amounts to which Executive is entitled to under the Company’s benefit plans in accordance with their terms.

 

(b) Additional Compensation and Benefits Upon Non-Renewal by the Company or Upon Termination by the Company Without Cause or by Executive for Good Reason. If, at any time, (i) the Company elects not to renew this Agreement for any Renewal Term and Executive’s employment terminates as a result of such non-renewal, (ii) the Company terminates Executive’s employment without Cause (as defined in Section 9(b) above), or (iii) Executive terminates his employment for Good Reason (as defined in Section 9(d) above), then the Company shall, subject to Executive’s execution of a general release of claims in favor of the Company and subject to Executive’s compliance with Section 6 and Section 7, provide to Executive, in addition to the amounts set forth in Section 10(a) above, an amount equal to one (1) times the Executive’s then-current annualized Base Salary, less the amount of all compensation paid to Executive during the then-current term of this Agreement; provided, however, that in no event shall such payment equal less than four (4) months of the Executive’s then-current annualized Base Salary. Such payment shall be payable in equal installments over the balance of the then-current term of this Agreement, payable in accordance with the Company’s regularly scheduled payroll and commencing on the Company’s first regular payroll date that is five (5) days after the release of claims provided by Executive has become effective and binding upon Executive, provided, that, if the maximum forty-five (45) day consideration period and revocation period described in Section 10(d) spans two (2) tax years, then the payments shall commence in the second tax year. Additionally, if Executive is eligible and timely elects to continue his health insurance coverage pursuant to the COBRA statute, and subject to Executive’s execution of the release of claims referred to above, the Company will continue to pay its portion of Executive’s monthly health insurance premiums for the earlier of (A) the remainder of the then-current Term of this Agreement, or (B) the date Executive’s coverage under such group health plans terminates for any reason; provided that the Company’s payment of such premiums shall be limited to the same proportion of the cost of coverage under the Company’s group health plans as the Company pays on behalf of its employees generally (the “COBRA Entitlement”).

 

Executive shall have no obligation to mitigate any severance obligation of the Company under this Agreement by seeking new employment. The Company shall not be entitled to set off or reduce any severance payments owed to Executive under this Agreement by the amount of earnings or benefits received by Executive in future employment.

 

Notwithstanding the foregoing, with respect to any stock options, restricted stock, or other plans or programs in which Executive is participating at the time of termination of his employment, Executive’s rights and benefits under each of these plans, if any, shall be determined in accordance with the terms, conditions, and limitations of the plans and any separate agreement executed by Executive which may then be in effect.

 

(c) Penalty for Breach of Covenants. For any period of time that Executive is in breach of, or threatens to breach, Section 7, the Company shall not be obligated to pay any payments referenced in Section 10(b) of this Agreement, the Company’s payment obligations referenced in Section 10(b) of this Agreement shall terminate and expire, and the Company shall have no further obligations to Executive from and after the date of such breach or threatened breach. Additionally, the Company may recover any payments previously paid under Section 10(b) of this Agreement for the period of time that Executive was in breach of Section 7, save and except for $100, which $100 the Parties agree is sufficient consideration for the Waiver and Release of Claims referred to in Section 10(d). In addition, the Company shall have all other rights and remedies available under this Agreement, any other agreement, at law, or in equity.

 

 

(d) Release. Payment of any of the amounts described in this Section 10 is conditioned upon Executive’s execution of a Waiver and Release of Claims in the form attached hereto as Exhibit A relating to the period of Executive’s employment with the Company, within the forty-five (45) day period following the end of Executive’s employment and not revoking such Waiver and Release of Claims or any portion of it during any applicable revocation period.

 

11. Reserved.

 

12. Other Provisions.

 

(a) Remedies; Legal Fees. Each of the Parties to this Agreement shall be entitled to enforce his or its rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in his or its favor. In any action resulting from a breach of this Agreement, the prevailing Party shall be entitled to recover his or its reasonable attorneys’ fees.

 

(b) Limitations on Assignment. In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute. Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the explicit written consent of the Company. Any attempted assignment by Executive in violation of this Section 12(b) shall be void. Except as provided in this Agreement, nothing in this Agreement entitles any person other than the Parties to this Agreement to any claim, cause of action, remedy, or right of any kind, including, without limitation, the right of continued employment; provided, however, that the Company may freely assign this Agreement, and/or any rights hereunder, to any Affiliate or to any other entity. Further, to the extent applicable, each Affiliate of the Company will be deemed a third-party beneficiary and may enforce the applicable rights and obligations under this Agreement. The Company’s assignees or successors are expressly authorized to enforce the Company’s rights and privileges hereunder, including without limitation the restrictive covenants set forth in Section 6 and Section 7.

 

(c) Severability and Reformation. The Parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 12(c).

 

 

(d) Notices. Any notice or other communication required, permitted or desired to be given under this Agreement shall be deemed delivered when personally delivered; the business day, if delivered by overnight courier; the same day, if transmitted by facsimile on a business day before noon, Eastern Standard Time; the next business day, if otherwise transmitted by facsimile; and the third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as addressed or transmitted as follows (or to such subsequent addresses as the Parties may give one another notice of):

 

If to Executive, at the last address for him on record with the Company. If to the Company:

 

Intelligent Protection Management Corp.

30 Jericho Executive Plaza

Suite 400E

Jericho, NY 11753

 

(e) Further Acts. Whether or not specifically required under the terms of this Agreement, each Party shall execute and deliver such documents and take such further actions as shall be necessary in order for such Party to perform all of his or its obligations specified in this Agreement or reasonably implied from this Agreement’s terms.

 

(f) Publicity and Advertising. Executive agrees that the Company may use his name, picture, or likeness for any advertising, publicity or other business purpose at any time, during the term of this Agreement and may continue to use materials generated during the term of this Agreement for a period of six (6) months thereafter. The use of Executive’s name, picture, or likeness shall not be deemed to result in any invasion of Executive’s privacy or in violation of any property right Executive may have; and Executive shall receive no additional consideration if his name, picture or likeness is so used. Executive further agrees that any negatives, prints or other material for printing or reproduction purposes prepared in connection with the use of his name, picture or likeness by the Company shall be and are the sole property of the Company.

 

(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.

 

(h) Venue. The exclusive venue for all suits or proceedings arising from or related to this Agreement shall be in a court of competent jurisdiction in Nassau County, New York.

 

(i) Waiver. A Party’s waiver of any breach or violation of any Agreement provisions shall not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement provision.

 

(j) Entire Agreement, Amendment, Binding Effect. This Agreement constitutes the entire agreement between the Parties concerning the subject matter in this Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Executive acknowledges and represents that in executing this Agreement, he did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. Any amendment to this Agreement must be signed by all Parties to this Agreement. This Agreement will be binding on and inure to the benefit of the Parties hereto and their respective successors, heirs, legal representatives, and permitted assigns (if any). This Agreement supersedes any prior agreements between Executive and the Company concerning the subject matter of this Agreement. For the avoidance of doubt, (i) this Agreement shall not supersede that certain Agreement and Plan of Merger, dated as of August 11, 2024, by and among the Company, PALT Merger Sub 1, Inc., PALT Merger Sub 2, LLC, NTS and NewtekOne, Inc. or any agreements entered into in order to effect the transactions contemplated thereby and (ii) Executive agrees that this Agreement supersedes the March 1, 2024 Employment Agreement between NTS and Executive (the “Prior Agreement”), save and except for Paragraphs 13, 15, 18 ad 19 of the Prior Agreement, which Paragraphs 13, 15, 18 ad 19 of the Prior Agreement Executive agrees shall remain in full force and effect and may be enforced by the Company or any of its Affiliates.

 

(k) Counterparts. This Agreement may be executed in counterparts, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

 

(l) Directors and Officers Insurance/Indemnification. During the Employment Period, the Company shall maintain Executive as an insured party on directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers. Either through its directors and officers insurance policy and pursuant to the terms thereof or, if such insurance is not available, otherwise, the Company will indemnify and hold Executive harmless against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or proceeding to which Executive is a party, or threat thereof, by reason of his being or having been an officer or director of the Company or any Affiliate, to the extent permitted by applicable law; provided, however, that this indemnity shall not apply if Executive is determined by a court of competent jurisdiction (whether it be through a determination issued in a jury trial, arbitration, administrative hearing or trial, or bench trial) to have acted against the interests of the Company with gross negligence, gross misconduct, or gross malfeasance. If such a determination is entered, Executive shall reimburse Company for all amounts Company or its insurer paid under this Section 12(l) concerning such matter or related matters within thirty (30) days of the entry of such determination. Promptly after receipt by Executive of notice of the commencement of any action (including any governmental action) or threat thereof, Executive shall, if a claim covered by this Section 12(l) is to be made or is threatened against Executive, deliver to the Company a written notice of the commencement or threat thereof, and the Company shall have the right to participate in, and, to the extent, the Company so desires to assume the defense thereof with counsel selected by the Company and approved by Executive (whose approval shall not be unreasonably withheld); provided, however, that Executive (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Company, if, and only if, representation of Executive by the counsel retained by the Company would be inappropriate due to actual or potential differing interests between Executive and any other party represented by such counsel in such proceeding. Executive’s failure to deliver written notice to the Company within a reasonable time of the commencement or threat of any action for which Executive seeks indemnification under this Section 12(1), if prejudicial to the Company’s ability to defend such action, shall relieve the Company of any liability to Executive under this Agreement.

 

13. Section 409A of the Code

 

(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (ii) Executive is deemed at the time of his separation from service to be a “specified employee” under Section 409A of the Code; and (iii) at the time of Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of Executive’s separation from service) shall not be made until the earlier of (A) the first day of the seventh month following Executive’s separation from service or (B) the date of Executive’s death following such separation from service. During any period that payment or payments to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per annum rate equal to the highest rate of interest applicable to six (6) month money market accounts offered by the following institutions: Citibank N.A., Wells Fargo Bank, NA., or Bank of America, on the date of such “separation from service.” Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 13 (together with accrued interest thereon) shall be paid to Executive or Executive’s beneficiary in one lump sum.

 

(b) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Executive to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions. 

 

[Signature Page Follows]

  

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first indicated above.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
/s/ John Silberstein
By:	John Silberstein
Title:	Chairman of the Compensation Committee of the Board of Directors
EXECUTIVE:
/s/ Jared Mills
Jared Mills

 

Signature Page

to Executive Employment Agreement

 

 

EXHIBIT A

 

WAIVER AND RELEASE OF CLAIMS

 

This Waiver and Release of Claims (“Release”), effective as of the ______________ (the “Effective Date”), is made and entered into by and between Jared Mills (“Employee”) and Intelligent Protection Management Corp. (f/k/a Paltalk, Inc.), a Delaware corporation (the “Company”). Terms used in this Release with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Executive Employment Agreement made and entered into as of January 2, 2025 by and between the Company and Employee (the “Agreement”).

 

WHEREAS, Employee and the Company are parties to the Agreement; and

 

WHEREAS, Section 10 of the Agreement provides that Employee is entitled to certain payments and benefits upon separation from employment under certain circumstances specified in the Agreement if he signs a release agreement.

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and adequacy of which are acknowledged, Employee and the Company agree as follows:

 

1. Global Release. In consideration of the mutual promises contained in the Agreement, including the Company’s promises to pay Employee consideration under Section 10 of the Agreement, which are in addition to anything of value to which Employee is already entitled, Employee, on behalf of himself, his heirs, executors, successors and assigns, irrevocably and unconditionally releases, waives, and forever discharges the Company, NTS and all of either of their predecessors and all of their respective parents, divisions, subsidiaries, affiliates, joint venture partners, partners, and related companies, and their present and former agents, employees, officers, directors, attorneys, stockholders, plan fiduciaries, successors and assigns, including, without limitation, _________________________________ (collectively, the “Released Parties”), from any and all claims, demands, actions, causes of action, costs, fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which Employee has, had, or may have against the Released Parties relating to or arising out of his employment, or any terms of the Agreement, or any terms of the Prior Agreement from the Effective Date and up to and including the date Employee signs this Release. This Release includes, without limitation, claims at law or equity or sounding in contract (express or implied) or tort, claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, creed, disability, religion, military status, family status, marital status, partnership status, domestic violence, stalking and sex offense victim status, arrest and conviction record, predisposing genetic characteristic, alienage or citizenship status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including, without limitation, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the ADA Amendments Act of 2008, Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1991, the Civil Rights Acts of 1866 and/or 1871, 42 U.S.C. Section 1981, the Rehabilitation Act, the Family and Medical Leave Act, the Fair Labor Standards Act anti-retaliation provisions, the Sarbanes-Oxley Act, the Employee Polygraph Protection Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Lilly Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, the New York Labor Law, the New York State Civil Rights Law, the New York Workers’ Compensation Law, the New York City Human Rights Law, the Arizona Civil Rights Act, and the Fair Wages and Healthy Families Act, all as amended and including all of their respective implementing regulations, any federal, state, local or municipal whistleblower protection or anti-retaliation statute or ordinance, or any other federal, state, local, or municipal laws of any jurisdiction), claims arising under the Employee Retirement Income Security Act (except any employee benefits or employee participation rights as contained in the Agreement), or any other statutory or common law claims related to or arising out of his employment or any terms of the Agreement, from the Effective Date and up to and including the date of this Release’s execution by Employee. Notwithstanding the foregoing, nothing in this Release shall affect or impair: (a) any rights Employee may have to indemnification, including without limitation indemnification for attorneys’ fees, costs and/or expenses, pursuant to applicable statute, certificates of incorporation and by-laws of the Company or any of its Affiliates; (b) any of Employee’s rights arising under the Agreement stated in Section 12 or the applicable section of Section 10; (c) any rights that Employee has as a former employee under the Company’s employee benefit plans (other than any severance plan); or (d) any rights Employee may have that cannot be waived as a matter of law.

 

2. No Admission of Liability. Employee understands and agrees that this Release shall not in any way be construed as an admission by the Released Parties of any unlawful or wrongful acts whatsoever against Employee or any other person. The Released Parties specifically disclaim any liability to or wrongful acts against Employee or any other person.

 

Exhibit A

to Executive Employment Agreement

 

 

3. Time to Consider Release. Employee is hereby advised in writing by the Company that he should consult an attorney before executing this Release. Employee has a period of up to [twenty-one (21)/forty-five (45)] calendar days after receiving the Release within which to review and consider the provisions of this Release. Employee understands that if he does not sign this Release before the [twenty-one (21)/forty-five (45)] calendar day period expires, this Release offer will be withdrawn automatically.

 

[Additional information may be inserted if Employee’s employment ends as part of a layoff.]

 

4. Revocation Period. Employee understands and acknowledges that he has seven (7) calendar days following the execution of this Release to revoke his acceptance of this Release. This Release will not become effective or enforceable, and the payments and benefits described under Section 10 of the Agreement will not become payable, until after this revocation period has expired without his revocation. If Employee does not revoke the Release within the revocation period, the Company will commence the payments and benefits described under Section 10 of the Agreement as stated in Section 10(b) of the Agreement.

 

5. Confidentiality of Release and Company Information. Employee agrees to keep this Release, its terms, and the amount of payments and benefits related to this Release completely confidential. Employee agrees and understands that he is prohibited from disclosing any terms of this Release to anyone, except that he may disclose the terms of this Release and the amount of the payments and benefits related to this Release to his spouse, attorneys, accountants, and financial advisors or as otherwise required by law. Employee also agrees to continue to abide by the confidentiality provisions of the Agreement.

 

6. Non-Disparagement and Other Continuing Obligations. Employee agrees to continue to abide by Section 6 (“Confidential Information”) and Section 7 (“Restrictive Covenants”) of the Agreement and any other surviving obligations of Employee as set forth in the Agreement, including, without limitation, Section 3 therein.

 

7. Agreement to Return Company Property/Documents. Employee understands and agrees that his last day of active work in any Company office or on any Company owned or leased property will be __________________, 20__ (the “Separation Date”). Accordingly, Employee agrees that: (a) he will not take with him, copy, alter, destroy, or delete any files, documents, electronically stored information, or other materials, whether or not embodying or recording any Confidential Information, including copies, without obtaining in advance the written consent of an authorized Company representative; and (b) he will promptly return to the Company all Confidential Information, documents, files, records and tapes, whether written in hardcopy form or electronically stored, that have been in his possession or control regarding the Company, and he will not use or disclose such materials in any way or in any format, including written information in any form, information stored by electronic means, and all copies of these materials. Employee further agrees that on or before the Separation Date, he will return to the Company immediately all Company property, including, without limitation, keys, equipment, computer(s) and computer equipment, devices, Company cellular phones, Company credit cards, data, electronically stored information, lists, correspondence, notes, memos, reports, or other writings prepared by the Company or himself on behalf of the Company without altering any such files or items (e.g., without wiping the cellular phone or computer) before returning them to the Company.S

 

8. Authorized Use of Trade Secrets/ Confidential Information. Employee acknowledges and agrees that he is bound by Section 6 and Section 7 of the Agreement regardless of the reason for his separation from the Company or any of its Affiliates or any successor or assign. Notwithstanding the foregoing, Employee understands that Employee may disclose proprietary and/ or confidential information when required to do so by a court of competent jurisdiction, by any governmental agency having authority over Employee or the business of the Company or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order that Employee divulge, disclose or make accessible such information. The Company hereby notifies Employee in accordance with the Defend Trade Secrets Act of 2016 that Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Company further notifies Employee that if Employee files a lawsuit for retaliation against the Company for reporting a suspected violation of law, Employee may disclose the Company’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

 

Nothing in this Release shall prohibit either party from responding to a peace officer’s or a prosecutor’s inquiry or making a statement not initiated by that party in a criminal proceeding as is prohibited by Ariz. Rev. Stat. § 12-720.

 

Nothing in this Release shall prohibit either party from disclosing factual information relating to any future claim of discrimination to law enforcement, the equal employment opportunity commission, the state division of human rights, the attorney general, a local commission on human rights, or an attorney retained by the party.

 

Nothing in this Release shall prohibit any party or other person from the disclosure of any underlying facts or circumstances of any discrimination, harassment, or retaliation claim or from engaging in any actions protected by New York General Obligations Law § 5-336.

 

Exhibit A

to Executive Employment Agreement

 

 

9. Knowing and Voluntary Release. Employee understands that it is his choice whether to enter into this Release and that his decision to do so is voluntary and is made knowingly.

 

10. No Prior Representations or Inducements. Employee represents and acknowledges that in executing this Release, he did not rely, has not relied, and expressly disavows reliance on any communications, statements, promises, inducements, or representation(s), oral or written, by any of the Released Parties, except as expressly contained in this Release.

 

11. Choice of Law. This Release shall, in all respects, be interpreted, enforced, and governed under the laws of the State of New York. The parties agree that the language of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for, or against, any of the parties.

 

12. Severability. The Company and Employee agree that should a court declare or determine that any provision of this Release is illegal or invalid, the validity of the remaining parts, terms or provisions of this Release will not be affected and any illegal or invalid part, term, or provision, will not be deemed to be a part of this Release.

 

13. Counterparts. The Company and Employee agree that this Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

 

Please read carefully as this document includes a release of claims, including a release of claims under the
Age Discrimination in Employment Act (ADEA).

 

{Signature Page Follows}

 

Exhibit A

to Executive Employment Agreement

 

 

IN WITNESS WHEREOF, the Company and Employee hereto evidence their agreement by their signatures.

 

THE COMPANY:
INTELLIGENT PROTECTION MANAGEMENT CORP.
By:
Title :
EMPLOYEE:
Jared Mills

 

Exhibit A

to Executive Employment Agreement

 

 

Exhibit 14.1

 

INTELLIGENT PROTECTION MANAGEMENT CORP.
CODE OF CONDUCT

 

Introduction

 

The Board of Directors (the “Board”) of Intelligent Protection Management Corp. (together with its subsidiaries, “we,” “our,” “us” or the “Company”) has adopted this Code of Conduct (this “Code”) in order to:

 

●

promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

 

●

promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the U.S. Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;

 

●

promote compliance with applicable governmental laws, rules and regulations;

 

●

promote the protection of Company assets, including corporate opportunities and confidential information;

 

●

promote fair dealing practices;

 

●

deter wrongdoing; and

 

●

ensure accountability for adherence to this Code.

 

This Code applies to all officers, directors and employees of the Company. All directors, officers and employees are required to be familiar with this Code, comply with its provisions and report any suspected violations as described below.

 

1.

Our Commitment

 

The officers, directors and employees of the Company are committed to honesty, just management, fairness, providing a safe and healthy environment and respecting the dignity due everyone. For the communities in which we live and work, we are committed to observe sound business practices and to act as concerned and responsible neighbors, reflecting all aspects of good citizenship.

 

For our stockholders, we are committed to pursuing sound growth and earnings objectives and to exercising prudence in the use of our assets and resources.

 

2.

Promote a Positive and Safe Work Environment

 

All employees want and deserve a workplace where they feel safe, respected, satisfied and appreciated. We respect cultural diversity and will not tolerate harassment or discrimination of any kind, especially involving race, color, sex, religion, gender, age, national origin, disability, gender identity or expression, sexual orientation, veteran or marital status or any other characteristic protected by law.

 

Providing an environment that supports honesty, integrity, respect, trust, responsibility and citizenship permits us the opportunity to achieve excellence in our workplace. While everyone who works for the Company must contribute to the creation and maintenance of such an environment, our executives and management personnel assume special responsibility for fostering a work environment that will bring out the best in all of us. Supervisors and managers must be careful in words and conduct to avoid placing, or seeming to place, pressure on subordinates that could cause them to deviate from acceptable ethical behavior.

 

 

3.

Protect Yourself, Your Fellow Employees and the World We Live In

 

We are committed to providing a drug-free, safe and healthy work environment and to observing environmentally sound business practices. We will strive, at a minimum, to do no harm and where possible, to make the communities in which we work a safer and better place to live. Each of us is responsible for compliance with environmental, health and safety laws and regulations. In addition, we do not ever wish for an employee to undertake an unreasonable physical risk in his or her job performance or a risk outside the scope of his or her employment.

 

4.

Keep and Retain Accurate and Complete Records

 

We must maintain accurate and complete Company records. Transactions between the Company and outside individuals and organizations must be promptly and accurately entered into our books in accordance with generally accepted accounting practices and principles, government requirements, and the Company’s system of internal controls. In addition, any Company filings with regulatory authorities must be accurate, understandable and prepared in a timely manner. No one should rationalize or even consider misrepresenting facts or falsifying records. Such actions will not be tolerated and will result in disciplinary action.

 

The Company’s records must be retained according to applicable laws and policies relating to the retention of records. Any records that are potentially relevant to a breach of law, litigation or any pending, threatened or foreseeable, investigation or proceeding must not be destroyed. Any questions regarding record retention should be directed to the Company’s Corporate Secretary.

 

5.

Compliance with Laws

 

Officers, directors and employees must conduct our business in accordance with all applicable city, state, federal and international laws and regulations, both in letter and in spirit. Compliance with the law does not comprise our entire ethical responsibility. Rather, it is a minimum, absolutely essential condition for performance of our duties. Although not all employees, officers and directors are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Any question regarding compliance should be addressed to the Chief Financial Officer.

 

Officers, directors and employees must strictly adhere to all antitrust laws. These laws prohibit practices in restraint of trade such as price fixing and boycotting suppliers or customers. They also bar pricing intended to run a competitor out of business, disparaging, misrepresenting or harassing a competitor, stealing trade secrets, bribery and kickbacks.

 

6.

Avoid Conflicts of Interest

 

A conflict of interest can arise when your personal, outside business or family interests interfere or appear to interfere with your ability to make business decisions in the best interest of the Company. An actual conflict of interest exists when your personal interest and professional responsibility at the Company conflict, including your ability to remain objective in your role at the Company. A perceived conflict of interest exists when it appears your personal interests may compromise carrying out your professional responsibility at the Company in an objective manner. We seek to avoid any activity that is a conflict of interest or has the appearance of a conflict of interest with the Company. Officers, directors and employees should not have any financial or other business relationships that might impair, or even appear to impair, the independence of any judgment they may need to make on behalf of the Company.

 

 

Loans by the Company to, or guarantees by the Company of obligations of, employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of obligations of, any director or officer or their family members are expressly prohibited.

 

Officers and employees are under a continuing obligation to disclose to their immediate supervisor or the Company’s Chief Financial Officer any situation that presents the possibility of a conflict or disparity of interest between the officer, director or employee and the Company. A supervisor may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the Chief Financial Officer with a written description of the activity and seeking the Chief Financial Officer’s written approval. Any transaction that may involve potential conflicts of interest with officers and directors must be reviewed and approved by the Audit Committee of the Board (the “Audit Committee”). Directors should disclose any potential conflict to the Audit Committee and obtain a waiver from the Audit Committee before serving on the board of directors of a potential competitor or a customer, vendor or contractor of the Company. Disclosure of any potential conflict is the key to remaining in full compliance with this policy.

 

If a potential conflict of interest would constitute a “related party transaction” that would be required to be disclosed pursuant to applicable federal securities laws or accounting standards or regulations, the terms of the proposed transaction must be reported in writing to the Chief Executive Officer or the Chief Financial Officer, and must be reviewed and approved by the Audit Committee. Generally, a related party transaction is a transaction that involves a director, an executive officer, a person known by us to be the beneficial owner of more than 5% of our common stock or an immediate family member of any of the foregoing, directly or indirectly, and the Company that exceeds (i) $120,000 in amount (or if in another currency, an amount equivalent to $120,000) or (ii) if the Company qualifies as a “smaller reporting company”, the lesser of $120,000 or one percent of the average of the Company’s total assets at year end for the last two completed fiscal years. If an officer, director or employee has any questions as to whether a proposed transaction is a “related party transaction,” such person should contact the Company’s Chief Financial Officer for clarification.

 

Officers, directors and employees should not: (i) take for themselves personally opportunities that are discovered through the use of Company property, information or position; (ii) use Company property, information or position for personal gain; or (iii) directly compete with the Company.

 

7.

Fair Dealing

 

We must comply with the laws and regulations that pertain to management of the Company. We will compete fairly and ethically for all business opportunities. Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No director, officer or employee shall take unfair advantage of anyone through manipulation, concealment or abuse of privileged information, misrepresentation of facts or any other unfair dealing practices. In circumstances where there is reason to believe that the release or receipt of non-public information is unauthorized, do not attempt to obtain and do not accept such information from any source.

 

 

If you are involved in Company transactions, you must be certain that, to your knowledge, all statements, communications and representations are accurate and truthful.

 

8.

Avoid Illegal and Questionable Gifts or Favors

 

The sale and marketing of our products and services, and the procurement of products and services from third parties, should always be free from even the perception that favorable treatment was sought, received or given in exchange for the furnishing or receipt of business courtesies. Officers, directors and employees of the Company will neither give nor accept business courtesies that constitute, or could be reasonably perceived as constituting, unfair business inducements or that would violate law, regulation or policies of the Company, or could cause embarrassment to or reflect negatively on the Company’s reputation. Personal gifts and entertainment offered by persons doing business with the Company may be accepted when offered in the ordinary and normal course of the business relationship. However, the frequency and value of any such gifts or entertainment may not be so excessive that the ability to exercise independent judgment on behalf of the Company is or may appear to be compromised. Accordingly, if one receives or is offered a gift that is believed to have a value in excess of the lesser of (i) 0.5% of your annual base compensation, if applicable, and (ii) $500.00, or entertainment that is in excess of usual and customary levels, by any person providing or offering goods or services to the Company, you must promptly disclose the same to your supervisor who will advise you in writing whether the gift or entertainment is proper, based upon the standards set out in this Code. Any gift or entertainment determined to be improper must be returned, reimbursed or refused by you.

 

9.

Maintain the Integrity of Consultants, Agents and Representatives

 

Business integrity is a key standard for the selection and retention of those who represent the Company. Agents, representatives and consultants must certify their willingness to comply with the Company’s policies and procedures and must never be retained to circumvent the Company’s values and principles. Paying bribes or kickbacks, engaging in industrial espionage, obtaining the proprietary data of a third party without authority or gaining inside information or influence are just a few examples of what could give the Company an unfair competitive advantage and could result in violations of law.

 

10.

Protect Proprietary Information

 

Proprietary Company information may not be disclosed to anyone without proper authorization. Proprietary documents must be protected and secure. In the course of normal business activities, suppliers, customers and competitors may sometimes divulge to you information that is proprietary to their business. Respect the confidentiality of such proprietary information. In the event your employment with the Company should terminate, you will surrender to the Company all papers, documents, writings and other tangible property produced by you or coming into your possession by or through your employment (except as it relates to working conditions or wages). You will also surrender to the Company or delete electronically-stored proprietary Company information, and you agree that all such materials will at all times remain the property of the Company, unless otherwise approved in writing by an executive officer of the Company.

 

As set forth in the Company’s Insider Trading Policy, the Company prohibits the unauthorized disclosure of any material nonpublic information (as described therein) acquired in the workplace and prohibits the misuse of material nonpublic information in securities trading. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. Officers, directors and employees may not, therefore, disclose such information to anyone outside the Company, including family members and friends or on any internet-based forum, other than in accordance with those procedures. You should carefully review the Company’s Insider Trading Policy and abide by the guidelines set forth in the policy before engaging in any transactions involving the Company’s securities.

 

 

To the extent applicable, there are also unique procedures to be followed to protect our proprietary information when providing Company technical data or computer software to the U.S. Government or any other government. These procedures must be understood before delivering our goods or services to governments. The Chief Financial Officer can assist you with this.

 

Nothing in this Code prohibits employees from (i) reporting possible violations of law or regulation to, or communicating with or testifying before, any governmental agency or entity, including but not limited to (A) the U.S. Department of Justice, the SEC, the U.S. Congress, and any U.S. agency Inspector General, and (B) similar competent authorities in any non-U.S. jurisdiction, to the extent that any such authority has specific power under applicable law to receive or request the relevant information, (ii) making other disclosures that are protected under the whistleblower provisions of federal, state or local law or regulation, or (iii) disclosing information about wages or working conditions that is not proprietary Company information. Employees do not need the Company’s prior authorization to make any such reports or disclosures and they are not required to notify the Company that they have made such reports or disclosures. Furthermore, nothing in this Code prohibits or limits employees from reporting possible violations to the Company in accordance with the Company’s Whistleblower Policy.

 

11.

Protection and Proper Use of Company Assets

 

Personal use of Company property must always be in accordance with corporate policy. Proper use of Company property, information resources, material, facilities and equipment is the responsibility of each officer, director and employee of the Company. Each officer, director and employee of the Company should use and maintain these assets with the utmost care and respect, guarding against waste and abuse and never borrow or remove Company property without management’s permission.

 

12.

Political Contributions and Activities

 

The Company encourages its employees to become involved in civic affairs and to participate in the political process. Employees must understand, however, that their involvement and participation must be on an individual basis, on their own time and at their own expense. Federal, local and state laws govern political contributions and activities and may restrict certain donations from the Company, whether in the form of funds, goods or services, or employees’ work time.

 

13.

Public Disclosure

 

The Company’s periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules. Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel. In addition, each director, officer and employee who is involved in the Company’s disclosure process must be familiar with and comply with the Company’s disclosure controls and procedures and its internal control over financial reporting and take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure.

 

 

14.

Reporting and Enforcement; Waivers

 

Reporting and Investigation of Violations

 

Actions prohibited by this Code involving directors or executive officers must be reported to the Audit Committee. Actions prohibited by this Code involving anyone other than a director or executive officer must be reported to the reporting person’s supervisor or the Chief Financial Officer. Actions prohibited by this Code may also be reported anonymously pursuant to the Corporate Compliance/Whistleblower Hotline (the “Hotline”). The Hotline is intended to provide an avenue for directors, officers and employees to raise concerns and reassurance that they will be protected from reprisals or victimization for whistleblowing in good faith. However, if a reporting person feels that their anonymity is not required then they should follow our existing reporting procedure. The Audit Committee receives a copy of each report made through the Hotline.

 

The Company’s Chief Financial Officer is responsible for investigating all reported complaints and allegations concerning violations of this Code by anyone other than an executive officer or director. Any reported complaints and allegations regarding an executive officer or a director shall be investigated by the Audit Committee.

 

All directors, officers and employees are expected to cooperate in any internal investigation of misconduct. Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who if requested to divulge information withhold material information regarding a violation, and (iii) supervisors who approve or condone the violations or attempt to retaliate against employees or agents for reporting violations or violators.

 

Enforcement

 

The Company must ensure prompt and consistent action against violations of this Code. If, after investigating a report of an alleged prohibited action by any person other than an executive officer or director, the Chief Financial Officer determines that a violation of this Code has occurred, the Chief Financial Officer will report such determination to the Audit Committee. If, after investigating a report of an alleged prohibited action by a director or officer, the Audit Committee determines that a violation of this Code has occurred, the Audit Committee will report such determination to the Board.

 

Upon the Audit Committee’s receipt from the Chief Financial Officer of a determination that there has been a violation of this Code by a person other than an executive officer or director, the Audit Committee will take such preventative or disciplinary action as it deems appropriate, including, but not limited to, reassignment, demotion, dismissal and, in the event of criminal conduct or other serious violations of the law, notification of appropriate governmental authorities. Upon the Board’s receipt from the Audit Committee of a determination that there has been a violation of this Code by an executive officer or director, the Board will take such preventative or disciplinary action as it deems appropriate, including, but not limited to, reassignment, demotion, dismissal and, in the event of criminal conduct or other serious violations of the law, notification of appropriate governmental authorities.

 

Prohibition on Retaliation

 

Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who if requested to divulge information withhold material information regarding a violation, and (iii) supervisors who approve or condone the violations or attempt to retaliate against employees or agents for reporting violations or violators.

 

 

Waivers

 

If an officer, director or employee is uncertain whether a particular activity or relationship requires a waiver of this Code, the officer, director or employee should disclose it to the Company’s Chief Financial Officer (or the Audit Committee if you are an executive officer or a director), who will determine whether a waiver of this Code is required. If a waiver is required, the Company’s Audit Committee (or the Board in the case of an executive officer or director) will determine whether a waiver will be granted and any disclosures that must be made to stockholders. You may be required to agree to conditions before a waiver or a continuing waiver is granted.

 

15.

Conclusion

 

No Code can cover every situation that might arise in a company. This Code is designed to let all of the Company’s officer, directors and employees know the Company’s basic guiding principles and provide explanation on how to handle various situations. If you have questions on any situation, whether or not described in this Code, please ask. The first place to turn is your immediate supervisor or manager. If you are uncomfortable discussing a situation with your immediate supervisor or manager, you may go to anyone in management whom you feel comfortable with, including the Chief Financial Officer or the Audit Committee. We cannot stress our final point enough: “When in doubt, ask.”

 

This Code is subject to repeal and amendment at any time by the Board. This Code should not be construed as a contract of employment and does not change any person’s status as an at-will employee, if applicable, or otherwise alter any separate employment agreement any person has with the Company. This Code is for the benefit of the Company, and no other person is entitled to enforce this Code. This Code does not, and should not be construed to, create any private cause of action or remedy in any other person for a violation of this Code.

 

Last Updated: January 2, 2025

 

 

CODE OF CONDUCT Acknowledgment

 

By signing below, I acknowledge and certify that I have received, read, and understand the Code of Conduct (the “Code”) of Intelligent Protection Management Corp. (the “Company”).

 

I acknowledge that, unless otherwise stated in a separate employment agreement with the Company, my employment relationship with the Company is terminable at will, by the Company or me, at any time, for any reason, with or without cause.

 

I agree (i) to comply with the Code and conduct the business of the Company in keeping with the highest ethical standards and (ii) to comply with international, federal, state and local laws applicable to the Company’s businesses. I understand that failure to comply with the Code will lead to disciplinary action by the Company, which may include termination of my employment and/or the reduction of compensation or demotion.

 

Please note that regardless of whether you return an executed signature page, the Code is enforceable as long as you remain a director, officer or employee of Intelligent Protection Management Corp.

 

(Please Print)

 

Name
Business Unit/Location
Position Title
Signature
Date

 

Please sign and return entire document to the Chief Financial Officer and keep a copy for your own files.

 

Signature Page to the Acknowledgment of the Code of Conduct

 

 

Exhibit 14.2

 

INTELLIGENT PROTECTION MANAGEMENT CORP.
WHISTLEBLOWER POLICY

 

This Whistleblower Policy (this “Policy”) is binding upon you as an employee, officer, director, independent contractor or consultant of Intelligent Protection Management Corp. (together with its subsidiaries, the “Company”). Questions regarding this Policy should be directed to the Audit Committee of the Board of Directors of the Company (the “Audit Committee”) or the Company’s Chief Financial Officer.

 

Policy Overview

 

The purpose of this Policy is to reinforce the business integrity of the Company by providing a safe and reliable means for employees and others to report concerns they may have about conduct at the Company. By following this Policy, you can raise concerns, confidentially and anonymously if desired, and free of any retaliation, discrimination, or harassment.

 

Whether you are an employee, an officer or director, a consultant, an independent contractor or someone who does business with us, we ask that you bring to light good faith concerns regarding the Company’s business practices.

 

We ask that you follow this Policy to report good faith concerns regarding any of the following:

 

●

Suspected violations of our Code of Conduct, which we refer to in this Policy as “Ethics Violations.”

 

●

Suspected violations of any other Company policies or procedures, which we refer to in this Policy as “Corporate Policy Violations.”

 

●

Questionable accounting, violations of internal accounting controls, or any other auditing or financial matters, or the reporting of fraudulent financial information, which we refer to in this Policy as “Fraudulent Auditing and Accounting Activities” and each such violation as a “Fraudulent Auditing and Accounting Activity.”

 

●

Suspected violations of law or fraudulent activities other than a Fraudulent Auditing and Accounting Activity, which we refer to in this Policy as “Legal Violations” (Legal Violations, Ethics Violations, Corporate Policy Violations and Fraudulent Auditing and Accounting Activities are collectively referred to in this Policy as “Violations”).

 

If requested, we also ask that you provide truthful information in connection with an inquiry or investigation by a court, an agency, law enforcement, or any other governmental body.

 

Covered Individuals

 

This Policy applies to all directors, officers, employees, consultants, and independent contractors of the Company, all of whom are referred to collectively as “employees” or “you” throughout this Policy. In this Policy, references to “we,” “us,” and “our” refers to the Company.

 

As a Company employee, if you are aware of a potential Violation or Fraudulent Auditing and Accounting Activity and do not report it according to this Policy, your inaction may be considered a Violation itself, which may result in disciplinary action, up to and including termination of your employment or any other relationship that you may have with the Company.

 

 

Reporting and Investigation

 

If you believe that any Violation or Fraudulent Auditing and Accounting Activity has occurred or is occurring or you have a good faith concern regarding conduct that you reasonably believe may be a Violation or Fraudulent Auditing and Accounting Activity, we encourage you to promptly take one or more of the following actions:

 

●

Discuss the situation with your manager.

 

●

If you are uncomfortable speaking with your manager or believe your manager has not properly handled your concern or is involved in the Violation or Fraudulent Auditing and Accounting Activity, contact the Chief Financial Officer.

 

If you do not believe your concern is being adequately addressed, or you are not comfortable speaking with one of the above-noted contacts, you may report your concern through our Corporate Compliance/Whistleblower Hotline, which is administered through a third party on a confidential, anonymous basis, using one of the following methods:

 

●

Website: reports.syntrio.com/IPM

 

●

Phone:

 

o

English speaking USA and Canada 844-420-0044 (not available from Mexico)

 

o

Spanish speaking North America: 800-216-1288 (from Mexico user must dial 800-681-5340)

 

o

Contact Syntrio if you need a toll-free # for North American callers speaking languages other than English, Spanish or French

 

●

E-mail: reports@syntrio.com (must include Company name with report)

 

●

Fax: (215) 689-3885 (must include Company name with report)

 

This Policy provides a mechanism for the Company to be made aware of any alleged wrongdoings and address them as soon as possible. However, nothing in this Policy prohibits employees from (i) reporting possible violations of law or regulation to, or communicating with or testifying before, any governmental agency or entity, including but not limited to (A) the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Congress, and any U.S. agency Inspector General, and (B) similar competent authorities in any non-U.S. jurisdiction, to the extent that any such authority has specific power under applicable law to receive or request the relevant information, (ii) making other disclosures that are protected under the whistleblower provisions of federal, state or local law or regulation, or (iii) disclosing information about wages or working conditions that is not proprietary Company information. Employees do not need the Company’s prior authorization to make any such reports or disclosures, and they are not required to notify the Company that they have made such reports or disclosures.

 

Receipt of the report will be acknowledged to the sender within a reasonable period following receipt if the sender supplied an address for response.

 

All reports of a Violation or Fraudulent Auditing and Accounting Activity will be taken seriously and will be promptly and thoroughly investigated. The specific action taken in any particular case depends on the nature and gravity of the conduct or circumstances reported and the results of the investigation.

 

If a Violation or Fraudulent Auditing and Accounting Activity has been reported, investigated, and confirmed, the Company will take corrective action proportionate to the seriousness of the offense. This action may include disciplinary action against the accused party, up to and including termination of employment or any other working relationship that the offending party may have with the Company. Reasonable and necessary steps will also be taken to prevent any further Violation or Fraudulent Auditing and Accounting Activity.

 

 

However, a party who knowingly and intentionally files a false report or provides false or deliberatively misleading information in connection with an investigation of a report may face disciplinary action, up to and including termination of employment or other legal proceedings.

 

Handling Reports

 

Reports of Violations, Fraudulent Auditing and Accounting Activity, or other questionable conduct that are submitted by any means specified in this Policy will be handled as follows:

 

All reports received relating to accounting and auditing, including Fraudulent Auditing and Accounting Activity, will be entered on an accounting and auditing matters log, which will include, among other things: (i) the date the report was received, (ii) a description of the report, (iii) the reporting party (if provided), and (iv) the status and disposition of an investigation of the report.

 

The Chief Financial Officer will promptly report to the Audit Committee: (i) reports of Ethics Violations or Fraudulent Auditing and Accounting Activity, including any such reports that are received by the Chief Financial Officer but were not initially directed to the Audit Committee, (ii) any Violation or Fraudulent Auditing and Accounting Activity involving the Company’s executive officers or directors, and (iii) such other matters as the Chief Financial Officer deems significant. The Audit Committee shall direct and oversee an investigation of such reports, as well as any reports initially directed to the Audit Committee, as it determines to be appropriate. The Audit Committee may also delegate the oversight and investigation of such reports to management, including the Chief Executive Officer, the Chief Financial Officer or outside advisors, as appropriate.

 

All other reports regarding accounting or auditing matters shall be reviewed under the direction and oversight of the Chief Financial Officer, who will involve such other parties as deemed appropriate.

 

The Chief Financial Officer shall provide the Audit Committee with a quarterly report of all accounting or auditing reports received and an update of pending investigations. The Audit Committee may request special treatment for any report and may assume the direction and oversight of an investigation of any such report.

 

All other reports will be logged separately and shall be reviewed under the direction and oversight of the Chief Financial Officer, who will forward them to the appropriate person or department for investigation, unless the Chief Financial Officer determines that other treatment is necessary.

 

Confidentiality

 

Information disclosed during the course of the investigation will, to the extent practical and appropriate, remain confidential in compliance with the Company’s Code of Conduct, except as may be reasonably necessary under the circumstances to facilitate the investigation, take remedial action, or comply with applicable law.

 

For any Violation or Fraudulent Auditing and Accounting Activity not reported through an anonymous report, we will advise the reporting party that the Violation or Fraudulent Auditing and Accounting Activity has been addressed and, if we can, of the specific resolution. However, due to confidentiality obligations, there may be times when we cannot provide the details regarding the corrective or disciplinary action that was taken.

 

 

Nothing in this Policy in any way prohibits or is intended to restrict or impede employees from discussing the terms and conditions of their employment with co-workers or union representatives, exercising protected rights under Section 7 of the National Labor Relations Act, exercising protected rights to the extent that such rights cannot be waived by agreement, or otherwise disclosing information as permitted by law.

 

No Retaliation

 

The Company strictly prohibits and does not tolerate unlawful retaliation against any employee, officer, consultant, or independent contractor for reporting a Violation or Fraudulent Auditing and Accounting Activity or suspected Violation or Fraudulent Auditing and Accounting Activity in good faith or otherwise cooperating in an investigation of a Violation or Fraudulent Auditing and Accounting Activity. All forms of unlawful retaliation are prohibited, including any form of adverse action, discipline, threats, intimidation, or other form of retaliation for reporting under or complying with this Policy. The Company considers retaliation a Violation itself, which will result in disciplinary action, up to and including termination of employment or any other working relationship with the Company.

 

If you have been subject to any conduct that you believe constitutes retaliation for having made a report in compliance with this Policy or for having participated in any investigation relating to an alleged Violation or Fraudulent Auditing and Accounting Activity, please immediately report the alleged retaliation to the Chief Financial Officer ideally within ten (10) days of the offending conduct. If, for any reason, you do not feel comfortable discussing the alleged retaliation with the Chief Financial Officer, please report the alleged retaliation through the Corporate Compliance/Whistleblower Hotline using the information above. The appropriate individuals will ensure that an investigation is conducted in a timely fashion.

 

Your complaint should be as detailed as possible, including the names of all individuals involved and any witnesses. The Company will directly and thoroughly investigate the facts and circumstances of all perceived retaliation and will take prompt corrective action, if appropriate.

 

Additionally, any manager or supervisor who observes retaliatory conduct must report the conduct to the Chief Financial Officer so that an investigation can be made and corrective action taken, if appropriate.

 

Bringing any alleged retaliation to our attention promptly enables us to honor our values, and to promptly and appropriately investigate the reported retaliation in accordance with the procedures outlined above.

 

Any employee, regardless of position or title, who has been determined to have engaged in retaliation in violation of this Policy, will be subject to appropriate disciplinary action, up to and including termination of employment or any other working relationship with the Company.

 

No employee will be subject to liability or retaliation for disclosing a trade secret if it is done in compliance with 18 U.S.C. §1833 and is made either:

 

●

In confidence to a federal, state, or local government official or to an attorney solely for the purpose of making a report in compliance with this Policy or participating in any investigation relating to an alleged Violation or Fraudulent Auditing and Accounting Activity; or

 

●

In a complaint or other document filed in a lawsuit or other proceeding under seal.

 

Modification

 

The Company expressly reserves the right to change, modify, or delete the provisions of this Policy without notice.

 

Administration

 

The Company’s Audit Committee is responsible for the administration of this Policy. All employees are responsible for consulting and complying with the most current version of this Policy. If you have any questions regarding this Policy or concerning the scope or delegation of authority, please contact the Audit Committee or the Company’s Chief Financial Officer.

 

Effective Date

 

This Policy is effective as of January 2, 2025.

 

 

ACKNOWLEDGMENT OF RECEIPT AND REVIEW

 

I, _______________________ (employee name), acknowledge that on _____________________ (date), I received a copy of Intelligent Protection Management Corp.’s Whistleblower Policy (the “Policy”), effective as of January 2, 2025, and that I read it, understood it, and agree to comply with it. I understand that Intelligent Protection Management Corp. has the maximum discretion permitted by law to interpret, administer, change, modify, or delete the Policy at any time with or without notice. The Policy is not promissory and does not set terms or conditions of employment or create an employment contract.

 

	Signature
	Printed Name
	Date

 

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the incorporation by reference in this Current Report on Form 8-K of our report, dated November 12, 2024, with respect to our audits of the consolidated financial statements of Newtek Technology Solutions, Inc. as of December 31, 2023 and 2022 and for the years then ended.

 

/s/ Grassi & Co., CPAs, P.C.

 

Jericho, New York

January 2, 2025

 

Exhibit 99.1

 

Paltalk, Inc. Completes Acquisition of Newtek Technology Solutions, Inc.

 

Paltalk to expand technology-focused service offerings in the cloud infrastructure and cybersecurity sectors

 

Completed divestiture of “Paltalk”, “Camfrog” and “Vumber” applications

 

Paltalk will operate under the name “Intelligent Protection Management Corp.” and trade under ticker “IPM” beginning on January 6, 2025

 

Jericho, NY – January 2, 2025 (GLOBE NEWSWIRE) -- via NewMediaWire – Paltalk, Inc. (“PALT,” the “Company,” “we,” our,” or “us”) (NASDAQ: PALT), a communications software innovator that powered multimedia social applications, today announced the completion of its previously announced acquisition of Newtek Technology Solutions, Inc. (“NTS” and such transaction, the “Acquisition”), from NewtekOne, Inc. In connection with the closing of the Acquisition, the Company also completed the sale of its “Paltalk”, “Camfrog” and “Vumber” applications and certain assets and liabilities related to such applications to Meteor Mobile Holdings, Inc. (the “Divestiture”). The Acquisition and the Divestiture were approved by the Company’s stockholders at a special meeting held on December 30, 2024.

 

The Company’s business will be focused on providing server hosting, cloud hosting, data storage, managed security, backup and disaster recovery, and other related services, including consulting and implementing technology solutions. The Company will operate under the name “Intelligent Protection Management Corp.” The Company’s common stock will commence trading under the ticker symbol “IPM” on The Nasdaq Capital Market on January 6, 2025. As a result of the Divestiture, the Company will no longer provide video-based, live streaming, virtual camera and telecommunications software to consumers.

 

Jason Katz, Paltalk’s Chairman and Chief Executive Officer, commented: “Today marks a transformational milestone for the Company. With the Acquisition of NTS now complete, we expect that NTS will have an immediate and meaningful impact on our revenue, since NTS’s revenue in 2023 was approximately three times greater than Paltalk’s 2023 revenue. We look forward to entering the cloud infrastructure and cybersecurity sectors and serving our new customers, including NewtekOne. Our strategic focus on technology and our experienced management team form the foundation for us to achieve greater scale and reach to deliver the best service to our customers and value to our stockholders.”

 

Mr. Katz continued, “I would like to welcome the NTS employees to our team. Together, I am confident we can continue to optimize our strategies and cross-selling efforts of our products to offer effective technology solutions to our customers and position our Company for long-term success.”

 

Advisors

 

Haynes and Boone, LLP served as legal counsel to Paltalk, Inc. Sullivan & Cromwell LLP served as legal counsel to NewtekOne, Inc.

 

 

About Paltalk, Inc. (Nasdaq: PALT)

 

Paltalk, Inc. (now known as Intelligent Protection Management Corp.) is a communications software innovator that powered multimedia social applications. The Company has an over 20-year history of technology innovation and holds 8 patents. For more information, please visit: http://www.ipm.com.

 

To be added to our news distribution list, please visit: https://investors.paltalk.com/alerts.

 

About Newtek Technology Solutions, Inc.

 

NTS provides dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery, and other related services including consulting and implementing technology solutions for enterprise and commercial clients across the U.S. as well as small-and-medium sized businesses. NTS’s management team has expertise and experience leveraging a broad range of technology solutions and services that enable businesses to operate more efficiently and securely.

 

Forward-Looking Statements

 

Certain statements contained in this press release constitute “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “began,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “would” and variations of such words and similar expressions are intended to identify such forward-looking statements. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements in this press release may include, but are not limited to, statements relating to (i) estimates of future synergies, savings and efficiencies as a result of the Acquisition, (ii) expectations regarding the Company’s ability to effectively integrate assets it acquired as a result of the Acquisition and (iii) expectations of future plans, priorities, focus and benefits of the Acquisition. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, including but not limited to, general business and economic conditions globally, industry trends, competition, changes in government and other regulation, changes in political and economic stability, disruptions in business operations due to reorganization activities, interest rate and currency fluctuations, the inability of the Company to realize successfully any anticipated synergy benefits of the Acquisition, the inability of the Company to integrate successfully NTS’s operations, fluctuations and volatility in the Company’s stock price, the ability of the Company to successfully execute strategic plans, the ability of the Company to maintain customer and partner relationships and the timing and market acceptance of new service offerings. More information about factors that could cause actual results to materially differ from those described in the forward-looking statements can be found in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise, except as required by applicable securities laws. All forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof.

 

Investor Contacts:

 

IR@paltalk.com

Clearthink

nyc@clearthink.capital

(917) 658-7878

 

 

 

v3.24.4

Cover	Dec. 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 30, 2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-38717
Entity Registrant Name	PALTALK, INC.
Entity Central Index Key	0001355839
Entity Tax Identification Number	20-3191847
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	30 Jericho Executive Plaza
Entity Address, Address Line Two	Suite 400E
Entity Address, City or Town	Jericho
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11753
City Area Code	212
Local Phone Number	967-5120
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	PALT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

---